3. the information below relates to a sales type lease in which lease payments aremade semiannually at the beginning of each periodLease termLessor's desired rate of returnLesse's incremental borrowing rateCurrent fair market value of leased asset5 years12% per year10% per year$600,000Based on the information above, calculate the amount of the semi-annual payment asdetermined by the lessor.

The present value factor of an annuity:PVF = 1−(1+𝑟)−𝑛𝑟 / rWhere:r = interest rate per period…

Answered: 3. the information below relates to a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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consider $175,000 as lease payment
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $14.000 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability $ 42,000✔✔ 42,000 41,084 42,000✔ 41,084 X 41,084 X 2 45.070 X 47.600 45.070 X 1 $2,000✔ 41,084 X 41.084 X 3 3 12% $0 $0 Answer is complete but not entirely correct. Situation 3 none Purchase option: After (years) Exercise price Reasonably certain? Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest…
Each of the three Independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. (FV of $1, PV of $1, EVA of $1, PVA of $1, EVAD of $1 and PVAD of $1) (Use approprlate factor(s) from the tables provided.) Situation 1 2 Lease term (years) Lessor's rate of return (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset 10 20 11% 9% 12% 12% 10% 11% $720,000 $1,100,000 $305,000 Requlred: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease llability, for each of the above situatlons. (Round your answers to the nearest whole dollar.) Right of-use Asset/Lease Payable Lease Payments Situation 1 Situation 2 Situation 3
A lessee has developed the following information regarding a lease contract, with payments due at the beginning of the period. Use this information to determine the amount at which the lease obligation will initially be recorded. Description Amount Present value Present value of total of annuity due amount Annual lease $4,500 S16.528 S14,258 payment Discount rate 6% Number of periods 4 Purchase option $300 S238 Group of answer choices: 18,000 14,495 16,528 14,258 18,300 16,766
Check my work mode: This shows what is correct or in Each of the four independent situations below describes a sales-type lease in which annual leas the beginning of each year. Each is a finance lease for the lessee. (FV of $1. PV of $1. EVA 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 option: After (years). Exercise price Reasonably certain? Situation 1 2 3 4 4 4 4 4 4 5 5 7 11% 11% 11% 11% $4,000 $2,000 e 0 е $2,000 $ 4,000 none 3 4 3 n/a $ 7,000 $1,000 $3,000 n/a no no yes Determine the following amounts at the beginning of the lease: (Round your final answers to nee Answer is complete but not entirely correct. Situation 1 2 3 4 A The lessor's: 1 Total lease payments $ 40,000 $ 44,000 S 42,000 $ 33,000 2 Gross investment in the lease 40,000 44,000 44,000 37,000 × 3. Net investment in the lease 34,437 37,072 37,072 32,244…
Each of the independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit interest rate. Lease term Lessor's desired rate of return Lessee's incremental borrowing rate Fair value of asset Periods; interest rate 10 periods, 10% 10 periods, 12% 20 periods, 10% 20 periods, 12% Annual lease payment 1 Lessee 10 years For convenience, here are some table values: 10% $ 600,000 5.6502 8.5136 7.4694 12% Situation PV, ordinary PV, annuity annuity due 6.1446 6.7590 6.3283 9.3649 8.3658 Situation 1 2 Lessor Situation 2 20 years 12% Required: For each situation determine the amount of the annual lease payment, as calculated by the lessor. Note: Round your answers to the nearest whole dollar amounts. 10% $ 400,000
H1.
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $10,000 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed Purchase option: After (years) Exercise price Reasonably certain? A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability $ Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. 1 1 2 4 4 118 Situation $0 $0 none 3 2 Situation $ 4,000 $0 40.000 $ 40,000 $ 40,000 $ 44,000 44.000 40,000 34,437 4 5 118 3 $ 7,000 no Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 4 3 33,000 37,000 4 5 118 $…
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $13,500 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed Purchase option: A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability $ 1 67,500 2 Situation 1 67,500 5 5 11% $ 0 none 3 2 After (years) Exercise price Reasonably certain? Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. 67,500 Situation 5 6 11% $ 5,400 $ 0 4 4 $ 7,700 no 3 5 6 11% $ 2,700 $ 2,700 5 $ 1,700 no 4 5 8 11% $0 $ 5,400 3 $…
D
Each of the four independent situations below describes a finance lease in which annual lease payments are pay- able at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. Situation Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value 1 4 10% $50,000 $50,000 0 2 7 11% $350,000 $350,000 $ 50,000 0 3 5 9% $75,000 $45,000 $7,000 $7,000 Required: For each situation, determine: a. The amount of the annual lease payments as calculated by the lessor. b. The amount the lessee would record as a right-of-use asset and a lease liability. 4 8 12% $465,000 $465,000 10 $ 45,000 $ 50,000
Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of S1, PVA of $1. EVAD of $1 and PVAD of $1) Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value. Guaranteed fair value Situation 1 Situation 2 Situation 3 Situation 4 1 Lease Payments 6 10% $ 58,000 $ 58,000 e 0 2 Situation 9 11% $ 358,000 $ 358,000 $ 58,000 Residual Value PV of Lease Guarantee Payments 0 7 9% $ 83,000 $ 53,000 $ 15,000 $ 15,000 Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest whole dollar amount. PV of…

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