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. Situation 1 Situation 2 Situation 3 Situation 4 Lease Payments $ $ $ $ Residual Value Guarantee 13,824 $ 44,650 $ 11,009 $ 60,146 0 0 0 PV of Lease Payments PV of Residual Value Guarantee $ $ $ 0 0 0 $ $ $ $ Right-of-use Asset/Lease Liability 68,000 368,000 93,000 483,000
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. Situation 1 Situation 2 Situation 3 Situation 4 Lease Payments $ $ $ $ Residual Value Guarantee 13,824 $ 44,650 $ 11,009 $ 60,146 0 0 0 PV of Lease Payments PV of Residual Value Guarantee $ $ $ 0 0 0 $ $ $ $ Right-of-use Asset/Lease Liability 68,000 368,000 93,000 483,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Manji
Transcribed Image Text: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, FVAD 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
Lease Payments
$
$
$
$
1
13,824 $
44,650 $
11,009 $
60,146
6
9%
$ 68,000
$ 68,000
0
0
0
0
0
2
Residual Value PV of Lease
Guarantee
Payments
Situation
$368,000
$368,000
9
10%
$ 68,000
0
3
$
$
$
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.
7
8%
$ 93,000
$ 63,000
$ 25,000
$ 25,000
PV of Residual
Value Guarantee
4
0
$
0
$
0 $
$
10
11%
$ 483,000
$ 483,000
$ 37,000
$ 42,000
Right-of-use
Asset/Lease
Liability
68,000
368,000
93,000
483,000
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