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. (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 rate of return Fair value of lease asset. Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value Situation 1 Situation 2 Situation 3 Situation 4 Lease Payments $ 14,149 1 Residual Value Guarantee $ $ $59,000 $59,000 5 10% 0 0 0 $ 0 2 PV of Lease Payments Situation 8 118 $ 59,000 0 Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. (Round your answers to the nearest whole dollar amount.) $359,000 $84,000 $359,000 $54,000 59,000 3 6 9% $ $ PV of Residual Value Guarantee 4 $16,000 $ 32,000 $16,000 $ 37,000 0 0 9 128 $474,000 $474,000 $ $ $ $ Right-of-use Asset/Lease Liability 59,000 0 0 0
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. (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 rate of return Fair value of lease asset. Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value Situation 1 Situation 2 Situation 3 Situation 4 Lease Payments $ 14,149 1 Residual Value Guarantee $ $ $59,000 $59,000 5 10% 0 0 0 $ 0 2 PV of Lease Payments Situation 8 118 $ 59,000 0 Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. (Round your answers to the nearest whole dollar amount.) $359,000 $84,000 $359,000 $54,000 59,000 3 6 9% $ $ PV of Residual Value Guarantee 4 $16,000 $ 32,000 $16,000 $ 37,000 0 0 9 128 $474,000 $474,000 $ $ $ $ Right-of-use Asset/Lease Liability 59,000 0 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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. (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 rate of return
Fair value of lease asset.
Lessor's cost of lease asset
Residual value:
Estimated fair value
Guaranteed fair value
Situation 1
Situation 2
Situation 3
Situation 4
Lease Payments
$
14,149
1
Residual Value
Guarantee
$
$
$59,000
$59,000
5
10%
0
0
0 $
0
2
PV of Lease
Payments
Situation
$359,000
$359,000
8
118
$ 59,000
0
59,000
Required:
a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would
record as a right-of-use asset and a lease liability, for each of the above situations. (Round your answers to the nearest
whole dollar amount.)
3
6
9%
$
$
$84,000
$54,000
$16,000
$16,000
PV of Residual
Value Guarantee
0
0
4
9
12%
$474,000
$474,000
$ 32,000
$ 37,000
$
$
$
$
Right-of-use
Asset/Lease
Liability
59,000
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3a0bf520-d031-4536-8ee7-77ee64708730%2F0b63ff72-84d3-40c0-92e2-ca1b71957e4a%2Fwtcqy1_processed.png&w=3840&q=75)
Transcribed Image Text: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. (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 rate of return
Fair value of lease asset.
Lessor's cost of lease asset
Residual value:
Estimated fair value
Guaranteed fair value
Situation 1
Situation 2
Situation 3
Situation 4
Lease Payments
$
14,149
1
Residual Value
Guarantee
$
$
$59,000
$59,000
5
10%
0
0
0 $
0
2
PV of Lease
Payments
Situation
$359,000
$359,000
8
118
$ 59,000
0
59,000
Required:
a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would
record as a right-of-use asset and a lease liability, for each of the above situations. (Round your answers to the nearest
whole dollar amount.)
3
6
9%
$
$
$84,000
$54,000
$16,000
$16,000
PV of Residual
Value Guarantee
0
0
4
9
12%
$474,000
$474,000
$ 32,000
$ 37,000
$
$
$
$
Right-of-use
Asset/Lease
Liability
59,000
0
0
0
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