Crane Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $819,000 are made at the end of each year. The present value of the lease payments at 9% is $4,122,000. Crane uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value).
Crane Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $819,000 are made at the end of each year. The present value of the lease payments at 9% is $4,122,000. Crane uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Crane Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $819,000 are made at the end of each year. The present value of the lease payments at 9% is $4,122,000. Crane uses the effective-interest method of amortization and sum-of-the-years'-digits
Transcribed Image Text:Prepare an amortization table for 20121 and 2022.
Crane Co.
Lease Amortization Schedule
Annual Lease
Interest on
Reduction in
Leas
Date
Receipt/Payment
Receivable/Liability
Receivable/Liability
Receivable/
1/1/21
$
12/31/21
$
12/31/22
%24
%24
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