Please answer 884xercises+ -E 15–1Lease classification• LO15-1Each of the four independent situations below describes a lease requiring annual lease payments of $10,000. For each situation,determine the appropriate lease classification by the lessee and indicate why.Situatlon1234Lease term (years)Asset's useful life (years)466Asset's fair value$44,000$45,000$41,000$38,000Purchase option that is reasonablycertain to be exercised?Annual lease paymentsLessor's implicit rate (known b lessee)Lessee's incremental borrowing rateNoYesNoNoBeg. of yr.End of yr.Beg. of yr.End of yr.5%5%6%5%6%5%5%5%E 15-2Finon

Capital lease and operating lease Capital lease: A capital lease refers to the lease in which the…

884 xercises + - E 15-1 Lease classification • LO15-1 Each of the four independent situations below describes a lease requiring annual lease payments of $10,000. For each situation, determine the appropriate lease classification by the lessee and indicate why. Situatlon 2 3 Lease term (years) Asset's useful life (years) Asset's fair value 4 6 $44,000 $45,000 $41,000 $38,000 Purchase option that is reasonably certain to be exercised? Annual lease payments Lessor's implicit rate (known b lessee) Lessee's incremental borrowing rate No Yes No No Beg. of yr. End of yr. Beg. of yr. 5% End of yr. 5% 5% 6% 6% 5% 5% 5% E 15-2 Finon

884 xercises + - E 15-1 Lease classification • LO15-1 Each of the four independent situations below describes a lease requiring annual lease payments of $10,000. For each situation, determine the appropriate lease classification by the lessee and indicate why. Situatlon 2 3 Lease term (years) Asset's useful life (years) Asset's fair value 4 6 $44,000 $45,000 $41,000 $38,000 Purchase option that is reasonably certain to be exercised? Annual lease payments Lessor's implicit rate (known b lessee) Lessee's incremental borrowing rate No Yes No No Beg. of yr. End of yr. Beg. of yr. 5% End of yr. 5% 5% 6% 6% 5% 5% 5% E 15-2 Finon

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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Exercise 15-9 (Algo) Lessor calculation of annual lease payments; lessee calculation of asset and liability [LO15-2] 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. 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) Situation 1 2 3 Lease term (years) 11 21 4 Lessor's rate of return (known by lessee) 10% 8% 11% Lessee's incremental borrowing rate 11% 9% 10% Fair value of lease asset $800,000 $1,180,000 $385,000 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.
Exercise 15-9 (Algo) Lessor calculation of annual lease payments; lessee calculation of asset and liability [LO15-2] 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. 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) Lease term (years) Lessor's rate of return (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset Situation 1 Situation 2 Situation 3 Lease Payments Right-of-use Asset/Lease 1 Payable 10 10% 11% $790,000 Situation 2 20 8% 9% 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. $1,170,000 5 11% 10% $375,000
Exercise 15-1 (Static) Lease classification [LO15-1] Lease term (years) Asset's useful life (years) Asset's fair value Purchase option that is reasonably certain to be exercised? Annual lease payments. Lessor's implicit rate (known by lessee) Lessee's incremental borrowing rate Situation 1. 2 3 4 $44,000 Mo Beginning of year 5% 5x Lease Classification 4 Situation $45,000 Yes End of year 60% 5% 3 4 6 $41,000 Required: Each of the four independent situations above describes a lease requiring annual lease payments of $10,000 For each situation, determine the appropriate lease classification by the lessee. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) No Beginning of year 5% 5% $38,000 No End of year 6%
Exercise 15-10 (Algo) Lessor calculation of annual lease payments; lessee calculation of asset and llability [LO15-2] Each of the three Independent situations below describes a finance lease in which annual lease payments are payable at the end of each year. The lessee is aware of the lessor's implicit rate of return. 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) Lease term (years) Lessor's rate of return (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset Situation 1 Situation 2 Situation 3 1 Lease Payments 10 10% 11% $680,000 Situation 2 20 8% 9% $1,020,000 6 11% 18% 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. Right-of-use Asset/Lease Payable $225,000
E 15-9 Lessor calculation of annual lease payments; lessee calculation of asset and liability LO15-2 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. Lease term (years) Lessor's rate of return (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset 1 10 11% 12% $600,000 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. Situation 2 20 9% 10% $980,000 3 4 12% 10% $185,000
E 15-26 Lease concepts; finance/sales- type leases; guaranteed and unguaranteed residual value LO15-2, LO15-6 Each of the four independent situations below describes a sales-type lease in which annual lease payments of $100,000 are payable at the beginning of each year. Each is a finance lease for the lessee. Determine the following amounts at the beginning of the lease: A. The lessor's: 1. Lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Lease payments 5. Right-of-use asset 6. Lease liability Lease term (years) Lessor's and lessee's interest rate Residual value: Estimated fair value Guaranteed by lessee 1 7 9% 0 0 Situation 2 7 11% $50,000 0 3 8 10% 4 8 12% $8,000 $50,000 $8,000 $60,000
Question 09020 The following details relate to the Lease agreement between JMK :Ltd ( Lessor ) and PJK ltd ( lessee ) Asset leased - Machinery Annual lease payments = K20000 Lease term- 5 years r - 10 % Useful life of machinery = 10 years Lease term - 8 years Residue value - nil Required – Calculate the present value of the MLP
es Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6] 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. (FV of $1, PV of $1. FVA of $1, PVA of $1. EVAD of $1 and PVAD of $1) Situation 1 2 3 4 Lease term (years) 5 8 6 9 Lessor's rate of return Fair value of lease asset 8% 9% 7% 10% $ 55,000 $355,000 Lessor's cost of lease asset $ 55,000 $ 355,000 $ 80,000 $ 50,000 $470,000 $ 470,000 Residual value: Estimated fair value Guaranteed fair value 0 $ 55,000 $12,000 $50,000 0 0 $ 12,000 $ 55,000 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…
hrl.7
Problem 15-3 (Algo) Lease amortization schedule [LO15-2] On January 1, 2024, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by Majestic Portions of the Equipment Leasing's lease amortization schedule appear below: January 1 2024 2025 2026 2027 2028 2029 2030 2041 2042 2043 Payments $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 $ 26,500 Effective Interest $ 22,167 $ 21,734 $ 21,257 $ 20,733 $ 20,156 $ 19,522 1. Lease liability 2. Right-of-use asset 3. Lease term 4. Effective annual interest rate 5. Total of lease payments 6. Total effective interest expense Decrease in Balance $ 26,500 $ 4,333 $ 4,766 $ 5,243 $ 5,767 $ 6,344 $ 6,978 $ 6,590 $ 19,910 $ 4,599 $ 21,901 $ 2,409 $ 24,091 Outstanding Balance $ 248,178 $ 221,679 $ 217,337 $ 212,571 $ 207,328 $ 201,561 $ 195,217 $ 188,238…