Question
The inception of a lease is 1/1/20X1. A third party guarantees the residual value of the asset under the lease, estimated to be $12,000 at
The inception of a lease is 1/1/20X1. A third party guarantees the residual value of the asset under the lease, estimated to be $12,000 at 1/1/20X6, the end of the lease term. Annual lease payments are $10,000 due each December 31 beginning 12/31/20X1. The last payment is due 12/31/20X5. Both the lessor and lessee use 10% as the interest rate. The remaining useful life of the asset was 6 years at inception. What is the net asset balance for the lessor and net liability balance for the lessee, at inception (rounded to the nearest dollar)?
Net asset (lessor) | Net liability (lessee) | |
1 | $45,359 | $45,359 |
2 | $37,908 | $47,908 |
3 | $45,359 | $37,908 |
4 | $37,908 | $45,359 |
5 | $47,119 | $38,339 |
Question 1Select one:
a.
Choice 2
b.
Choice 4
c.
Choice 3
d.
Choice 1
e.
Choice 5
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