Each of the four independent situations below describes a sales-type lease in which annual lease payments ofare payableat the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of$1) (Use appropriate factor(s) from the tables provided.)Lease term (years)Lessor's and lessee's interest rateResidual value:AEstimated fair valueGuaranteed by lessee.B798The lessor's:1. Lease payments2. Gross investment in the lease3. Net investment in the leaseThe lessee's:4. Lease payments5. Right-of-use asset6. Lease payable002Situation27118$50,0000Determine the following amounts at the beginning of the lease. (Round your intermediate and final answers to the nearest wholedollar amount.)Situation3810%$8,000$8,0008128$50,000$60,000

A lease is a contract that outlines the terms under which one party agrees to rent a property – in…

an are payab Each of the four independent situations below describes a sales-type lease in which annual lease payments of at the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD $1) (Use appropriate factor(s) from the tables provided.) Lease term (years) Lessor's and lessee's interest rate Residual value: Estimated fair value Guaranteed by lessee A The lessor's: 7 98 1. Lease payments 2. Gross investment in the lease 0 0 Situation 7 118 $50,000 0 Situation 3 8 10% $8,000 $8,000 Determine the following amounts at the beginning of the lease. (Round your intermediate and final answers to the nearest whole dollar amount.) 8 12% $50,000 $60,000

an are payab Each of the four independent situations below describes a sales-type lease in which annual lease payments of at the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD $1) (Use appropriate factor(s) from the tables provided.) Lease term (years) Lessor's and lessee's interest rate Residual value: Estimated fair value Guaranteed by lessee A The lessor's: 7 98 1. Lease payments 2. Gross investment in the lease 0 0 Situation 7 118 $50,000 0 Situation 3 8 10% $8,000 $8,000 Determine the following amounts at the beginning of the lease. (Round your intermediate and final answers to the nearest whole dollar amount.) 8 12% $50,000 $60,000

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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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) Situation 1 2 3 4 Lease term (years) Lessor's rate of return 4 10% 7 11% 5 8 9% 12% Fair value of lease asset $ 56,000 $ 356,000 $ 81,000 $ 471,000 Lessor's cost of lease asset $ 56,000 $ 356,000 $ 51,000 $ 471,000 Residual value: Estimated fair value 0 $ 56,000 Guaranteed fair value 0 0 $ 13,000 $13,000 $ 51,000 $ 56,000 Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the essee 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. Answer is complete but not entirely correct. Lease Payments Residual…
Each of the four independent situations below describes a sales-type lease in which annual lease payments a at the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1, $1) (Use appropriate factor(s) from the tables provided.) Situation 1 2 3 Lease term (years) 7 7 8 Lessor's and lessee's interest rate Residual value: 8 128 98 11% 10% Estimated fair value 0 $50,000 $8,000 $50,000 Guaranteed by lessee 0 0 $8,000 $60,000 Determine the following amounts at the beginning of the lease. (Round your intermediate and final answers dollar amount.) Situation 2 A The lessor's: 1. Lease payments 2. Gross investment in the lease 3. Net investment in the lease The lessee's: 4. Lease payments 5. Right-of-use asset 6. Lease payable B
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Manji
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