(a) Discuss the nature of this lease in relation to the lessor. This is a . Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.) (1) Lease receivable $ (2) Sales price $ (3) Cost of sales $
(a) Discuss the nature of this lease in relation to the lessor. This is a . Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.) (1) Lease receivable $ (2) Sales price $ (3) Cost of sales $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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6.
Cheyenne Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $276,779, and its unguaranteed residual value at the end of the lease term is estimated to be $18,400. National will pay annual payments of $39,900 at the beginning of each year. Cheyenne incurred costs of $189,300 in manufacturing the equipment and $3,700 in sales commissions in closing the lease. Cheyenne has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 10%.
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(a)
Discuss the nature of this lease in relation to the lessor.
This is a .
Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.)
This is a .
Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.)
| (1) | Lease receivable |
$
|
||
| (2) | Sales price |
$
|
||
| (3) | Cost of sales |
$
|
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