Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 15-9 (Algo) Lease concepts; sales-type leases; guaranteed and unguaranteed residual value [LO15-2, 15-6] Each of the four independent situations below describes a sales-type

image text in transcribed

Problem 15-9 (Algo) Lease concepts; sales-type leases; guaranteed and unguaranteed residual value [LO15-2, 15-6] Each of the four independent situations below describes a sales-type lease in which annual lease payments of $11,500 are payable at the beginning of each year. Each is a finance lease for the lessee. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed Purchase options After (years) Exercise price Reasonably certain? Situation 1 2 4 4 4 4 5 5 7 128 129 128 128 $4,600 $2,300 0 0 0 $2,300 $4,600 none 3 4 n/a n/a $7,300 $1,300 $3,300 yes Determine the following amounts at the beginning of the lease: (Round your final answers to nearest whole dollar.) A. The lessor's: Situation 1. Total lease payments $ 46,000 46,000 2. Gross investment in the lease 3. Net investment in the lease 46,000 39,121 B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability 46,000 46,000 39,121 39,121

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Financial Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

14th edition

130565353X, 978-1305887510, 1305887514, 978-1305653535

More Books

Students also viewed these Accounting questions

Question

In Problems 1130, solve each equation by factoring. x 2 + 4x = 0

Answered: 1 week ago

Question

What would be an ideal value?

Answered: 1 week ago