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 Residual Value Guarantee 20,075 70,738 $ 18,268 83,704 10% $ 70,000 $ 70,000 0 0$ 0 $ 5,000 $ $ 370,000 $ 370,000 0 $ 70,000 Situation 7 118 $ 70,000 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. 336,284 77,452 465,241 $ $ 3 Answer is complete but not entirely correct. PV of Lease Payments PV of Residual Value Guarantee $ 95,000 $ 65,000 5 $ 27,000 $ 27,000 0 98 $ $ 0 0 2,533 $ $ 485,000 $ 485,000 8 12% $ 39,000 $ 44,000 Right-of-use Asset/Lease Liability 70,000 336,284 77,452 467,774
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 Residual Value Guarantee 20,075 70,738 $ 18,268 83,704 10% $ 70,000 $ 70,000 0 0$ 0 $ 5,000 $ $ 370,000 $ 370,000 0 $ 70,000 Situation 7 118 $ 70,000 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. 336,284 77,452 465,241 $ $ 3 Answer is complete but not entirely correct. PV of Lease Payments PV of Residual Value Guarantee $ 95,000 $ 65,000 5 $ 27,000 $ 27,000 0 98 $ $ 0 0 2,533 $ $ 485,000 $ 485,000 8 12% $ 39,000 $ 44,000 Right-of-use Asset/Lease Liability 70,000 336,284 77,452 467,774
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PLEASE HELP ME WITH THE ONES I GOT INCORRECT. THANK YOU.
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
S
X
$
$
$
Lease
Payments
$
E
$
20,075
70,738 $
18,268 $
83,704
D
C
$
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.
4
Residual
Value
Guarantee
R
$ 70,000
$70,000
F
4
10%
0
0
0
%
5
V
$ 70,000 $
0
$ 336,284 $
0 $ 77,452 S
5,000 $ 465,241 $
2
Answer is complete but not entirely correct.
PV of
Lease
PV of Residual
Value
Guarantee
Payments
$ 370,000
$ 370,000
T
$ 70,000
0
Situation
< Prev
7
118
G
6
$ 95,000
$ 65,000
$ 27,000
$ 27,000
B
0
0
0
2,533
16 of 20
5
9%
$
$
$
$
MacBook Air
H
7
$ 485,000
$ 485,000
$ 39,000
$ 44,000
Right-of-use
Asset/Lease
Liability
8
12%
70,000✔
336,284
77,452
467,774 X
Next >
**
8
1
J
J
N M
K
3
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