Oriole Cosmetics, Inc. has entered into a leasing agreement to rent equipment from Culver Leasing services. There is no transfer oftitle, there is not a bargain purchase option, and the economic life test is not met. Based on the following information, what amountwould be used in the 90% test for the present value of the lease payments for the lessee?Annual Payments (1st day of the period) $51300Lease Term5 years$12300Guaranteed Residual ValueIncremental Borrowing Rate(lessor implicit rate is not known)6%, 5 periods8%, 5 periods10%, 5 periods$221212$256500$229583O $268800PV Annuity Due4.465114.312134.16986eTextbook and Media8%PV Ordinary Annuity4.212363.992713.79079PV Single Sum0.747260.680580.62092

Answered: Image /qna-images/answer/82e15e95-7061-48ed-a2bf-47365870c082.jpgPresent value of lease payment=$229583Option 3 is correct

Answered: Cosmetics, Inc. has entered into a…

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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Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2021. Courtney purchased the equipment from Doane Machines at a cost of $252,000, its fair value. (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.) Related Information: Lease term Quarterly lease payments Economic life of asset Interest rate charged by the lessor Required: Prepare a lease amortization schedule and appropriate entries for Baillie Power from the beginning of the lease through December 31, 2021. December 31 is the fiscal year end for each company. Appropriate adjusting entries are recorded at the end of each quarter. Complete this question by entering your answers in the tabs below. Amort Schedule General Journal 01/01/2021 03/31/2021 06/30/2021 09/30/2021 12/31/2021 03/31/2022 06/30/2022 09/30/2022 Total Prepare a lease amortization schedule. (Round your intermediate calculations and final answers to the nearest…
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