Trying to solve attached problem with leases.
. Exercise 2103 Metlock Company leases an automobile with a fair value of $16,767 from John Simon Motors, Inc., on the following terms: 1. Non-cancelable term of 50 months. 2. Rental of $350 per month (at the beginning of each month). 3. Metlock guarantees a residual value of $1,170. Delaney expects the probable residual value ' to be $1,170 at the end of the lease term. , 4. Estimated economic life of the automobile is 60 months. ' 5. Metlock's incremental borrowing rate is 6% a year (0.5% a month). Simon's implicit rate is unknown. Click here to view factor tables. . (For calculation purposes, use 5 decimal places as displayed in the factor table ; provided.) Your answer is correct. What is the nature of this lease to Metlock? The nature of this lease is a/an select a nature of the lease ranoe >7 lease. Your answer is correct. What is the present value of the lease payments to determine the lease liability? (Round ; answer to 0 decimal places, 2.9. 5,275.) $enter the Present value of the lease payments in dollars rounded Present value of the lease to 0 decimal laces payments I 15527 . Your answer is partially correct. Try again. Based on the original fact pattern, record the lease on Metlock's books at the date of , commencement. (Credit account titles are automatically indented when amount is ? entered. Do not indent manually.) m. . enter an account title enter a debit amount enter a credit amount . mi: m \" 1: b , : Leased Equ'; 15527 I enter an account title enter a debit amount enter a credit amount I Lease Liabilii I I 15527 Your answer is correct. V Record the first month's lease payment (at commencement of the lease). (Credit account titles _ are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.) enter an account title enter a debit amount enter a credit amount I Lease Liabilii I 350 i enter an account title enter a debit amount enter a credit amount Your answer is partially correct. Try again. Record the second month's lease payment. (Credit account titles are automatically indented . when amount is entered. Do not indent manually. Round answers to 0 decimal places, . 9.9. 5,275.) ; enter an account titl e enter a debit amount enter a credit amount ? ! Lease Liabilif 270 I ' enter an account title enter a debit amount enter a credit amount 5 IntereatEmei ' 80 1 f enter an account title enter a debit amount enter a credit amount 5 1 Cash I 350 W i 3 i l Your answer is partially correct. Try again. Record the first month's amortization on Metlock's books (assume straight-line). (Credit account titles are automatically indented when amount is entered. Do not indent . manually. Round answers to 2 decimal places, any. 5,275.25.) new _ new: cw: \" enter an account title enter a debit amount enter a credit amount I Amorlizationl 280 enter an account title enter a debit amount enter a credit amount I Riglt-of-Usei ! l 280 Your answer is incorrect. Try again. Suppose that instead of $1,170, Metlock expects the residual value to be only $500 (the V guaranteed amount is still $1,170). How does the calculation of the present value of the lease payments change from part (b)? (Round answer to 0 decimal places, 19.9. 5,275.) $enter the present value of lease payments in dollars . Pv of lease payments rounded to 0 decimal laces l 16439 Click if you would like to Show Work ' for this question: 0 en Show Work
