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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) 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 $ $ $ $ 1 13,824 $ 44,650 $ 11,009 $ 60,146 6 9% $ 68,000 $ 68,000 0 0 0 0 0 2 Residual Value PV of Lease Guarantee Payments Situation. $368,000 $368,000 9 10% $ 68,000 0 3 $ $ $ 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. 7 8% $ 93,000 $ 63,000 $ 25,000 $ 25,000 PV of Residual Value Guarantee 4 0 $ 0 $ 0 $ $ 10 11% $ 483,000 $ 483,000 $ 37,000 $ 42,000 Right-of-use Asset/Lease Liability 68,000 368,000 93,000 483,000

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) 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 $ $ $ $ 1 13,824 $ 44,650 $ 11,009 $ 60,146 6 9% $ 68,000 $ 68,000 0 0 0 0 0 2 Residual Value PV of Lease Guarantee Payments Situation. $368,000 $368,000 9 10% $ 68,000 0 3 $ $ $ 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. 7 8% $ 93,000 $ 63,000 $ 25,000 $ 25,000 PV of Residual Value Guarantee 4 0 $ 0 $ 0 $ $ 10 11% $ 483,000 $ 483,000 $ 37,000 $ 42,000 Right-of-use Asset/Lease Liability 68,000 368,000 93,000 483,000

Essentials Of Investments
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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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) 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 $ $ $ $ $ $ 13,824 44,650 11,009 $ 60,146 1 LA GA 6 9% $ 68,000 $ 68,000 0 0 0 0 Residual Value PV of Lease Guarantee Payments 2 Situation $368,000 $368,000 $ 68,000 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. Note: Round your answers to the nearest whole dollar amount. 9 10% SAS $ 3 $ $ PV of Residual Value Guarantee 7 8% $ 93,000 $ 63,000 $ 25,000 $ 25,000 0 $ 0 $ 0 SA $ $ 10 11% CA $ 483,000 $ 483,000 $ 37,000 $ 42,000 Right-of-use Asset/Lease Liability 68,000 368,000 93,000 483,000
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) 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 $ $ $ $ $ $ 13,824 44,650 11,009 $ 60,146 1 LA GA 6 9% $ 68,000 $ 68,000 0 0 0 0 Residual Value PV of Lease Guarantee Payments 2 Situation $368,000 $368,000 $ 68,000 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. Note: Round your answers to the nearest whole dollar amount. 9 10% SAS $ 3 $ $ PV of Residual Value Guarantee 7 8% $ 93,000 $ 63,000 $ 25,000 $ 25,000 0 $ 0 $ 0 SA $ $ 10 11% CA $ 483,000 $ 483,000 $ 37,000 $ 42,000 Right-of-use Asset/Lease Liability 68,000 368,000 93,000 483,000
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