Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability $ 1 40,000 40,000 34,437 2 Situation 3 $40,000 $ 40,000 44,000 44,000 $33,000 37,000
Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability $ 1 40,000 40,000 34,437 2 Situation 3 $40,000 $ 40,000 44,000 44,000 $33,000 37,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Rr.12.
![Each of the four independent situations below describes a sales-type lease in which annual lease payments of $10,000 are payable at
the beginning of each year. Each is a finance lease for the lessee.
Lease term (years)
Asset's useful life (years)
Lessor's implicit rate (known by lessee)
Residual value:
Guaranteed by lessee
Unguaranteed
Purchase option:
After (years)
Exercise price
Reasonably certain?
A. The lessor's:
1. Total lease payments
2. Gross investment in the lease
3. Net investment in the lease
B. The lessee's:
4. Total lease payments
5. Right-of-use asset
6. Lease liability
$
Determine the following amounts at the beginning of the lease:
Note: Round your final answers to nearest whole dollar.
1
1
2
4
4
118
Situation
$0
$0
none
3
2
Situation
$ 4,000
$0
40.000 $ 40,000 $ 40,000 $
44,000
44.000
40,000
34,437
4
5
118
3
$ 7,000
no
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)
4
3
33,000
37,000
4
5
118
$ 2,000
$ 2,000
4
$ 1,000
no
4
4
7
118
$0
$ 4,000
3
$ 3,000
yes](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F409f1718-8313-4672-9aca-08f9df25f737%2F66d3549b-f966-49a2-ab8c-009199872426%2F1t3wvi_processed.png&w=3840&q=75)
Transcribed Image Text:Each of the four independent situations below describes a sales-type lease in which annual lease payments of $10,000 are payable at
the beginning of each year. Each is a finance lease for the lessee.
Lease term (years)
Asset's useful life (years)
Lessor's implicit rate (known by lessee)
Residual value:
Guaranteed by lessee
Unguaranteed
Purchase option:
After (years)
Exercise price
Reasonably certain?
A. The lessor's:
1. Total lease payments
2. Gross investment in the lease
3. Net investment in the lease
B. The lessee's:
4. Total lease payments
5. Right-of-use asset
6. Lease liability
$
Determine the following amounts at the beginning of the lease:
Note: Round your final answers to nearest whole dollar.
1
1
2
4
4
118
Situation
$0
$0
none
3
2
Situation
$ 4,000
$0
40.000 $ 40,000 $ 40,000 $
44,000
44.000
40,000
34,437
4
5
118
3
$ 7,000
no
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)
4
3
33,000
37,000
4
5
118
$ 2,000
$ 2,000
4
$ 1,000
no
4
4
7
118
$0
$ 4,000
3
$ 3,000
yes
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