Each of the four independent situations below describes a finance lease in which annual lease payments are payable the beginning of each year. The lessee is aware of the lessor's implicit rate of return. 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) Situation 2 5 1 Lease term (years) 9 Lessor's rate of return 10% 11% 12% Fair value of lease asset $51,000 $ 351,000 $ 76,000 $ 466,000 Lessor's cost of lease asset $ 51,000 $ 351,000 $ 46,000 $ 466,000 Residual value: Estimated fair value Guaranteed fair value Situation 1 Situation 2 Situation 3 Situation 4 3 0 Lease Payments 8 4 0 $ 51,000 $8,000 $ 46,000 $ 8,000 $ 51,000 0 6 9% 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. Note: Round your answers to the nearest whole dollar amount. 3 a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amoun right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest whole dollar amount. Residual Value PV of Lease Guarantee Payments PV of Residual Value Guarantee Right-of-use Asset/Lease Liability
Each of the four independent situations below describes a finance lease in which annual lease payments are payable the beginning of each year. The lessee is aware of the lessor's implicit rate of return. 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) Situation 2 5 1 Lease term (years) 9 Lessor's rate of return 10% 11% 12% Fair value of lease asset $51,000 $ 351,000 $ 76,000 $ 466,000 Lessor's cost of lease asset $ 51,000 $ 351,000 $ 46,000 $ 466,000 Residual value: Estimated fair value Guaranteed fair value Situation 1 Situation 2 Situation 3 Situation 4 3 0 Lease Payments 8 4 0 $ 51,000 $8,000 $ 46,000 $ 8,000 $ 51,000 0 6 9% 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. Note: Round your answers to the nearest whole dollar amount. 3 a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amoun right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest whole dollar amount. Residual Value PV of Lease Guarantee Payments PV of Residual Value Guarantee Right-of-use Asset/Lease Liability
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: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.
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)
Situation
2
1
Lease term (years)
Lessor's rate of return
10%
11%
9%
Fair value of lease asset
$51,000 $ 351,000 $ 76,000 $ 466,000
Lessor's cost of lease asset $ 51,000 $ 351,000 $ 46,000 $ 466,000
Residual value:
Estimated fair value
Guaranteed fair value
5
Situation 1
Situation 2
Situation 3
Situation 4
Lease Payments
3
0
4
8
6 9
0 $ 51,000 $8,000 $ 46,000
0 $8,000 $ 51,000
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.
Note: Round your answers to the nearest whole dollar amount.
12%
a. & b. Determine the amount of the annual lease payments as calculated by the ressor and the amoun
right-of-use asset and a lease liability, for each of the above situations.
Note: Round your answers to the nearest whole dollar amount.
Residual Value PV of Lease
Guarantee Payments
PV of Residual
Value Guarantee
Right-of-use
Asset/Lease
Liability
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