Carla Vista Leasing Company signs an agreement on January 1, 2025, to lease equipment to Sandhill Company. The following information relates to this agreement. 1. 2. 3. 4. 5. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. The cost of the asset to the lessor is $421,000. The fair value of the asset at January 1, 2025, is $421,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value o $23,000, none of which is guaranteed. The agreement requires equal annual rental payments, beginning on January 1, 2025. Collectibility of the lease payments by Carla Vista is probable.
Carla Vista Leasing Company signs an agreement on January 1, 2025, to lease equipment to Sandhill Company. The following information relates to this agreement. 1. 2. 3. 4. 5. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. The cost of the asset to the lessor is $421,000. The fair value of the asset at January 1, 2025, is $421,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value o $23,000, none of which is guaranteed. The agreement requires equal annual rental payments, beginning on January 1, 2025. Collectibility of the lease payments by Carla Vista is probable.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Carla Vista Leasing Company signs an agreement on January 1, 2025, to lease equipment to Sandhill Company. The following
information relates to this agreement.
1.
2.
3.
4.
5.
The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6
years.
The cost of the asset to the lessor is $421,000. The fair value of the asset at January 1, 2025, is $421,000.
The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of
$23,000, none of which is guaranteed.
The agreement requires equal annual rental payments, beginning on January 1, 2025.
Collectibility of the lease payments by Carla Vista is probable.
Transcribed Image Text:Date
1/1/25
1/1/25
1/1/26
1/1/27
1/1/28
1/1/29
/1/30
12/31/30
Annual Lease Payment Plus
URV
$
$
CARLA VISTA LEASING COMPANY (Lessor)
Lease Amortization Schedule
$
$
Interest on Lease
Receivable
$
$
Recovery of Lease
Receivable
$
Lease Receivable
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