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. EVA 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 6 10% $58,000 $58,000 2 Situation 9 11% $358,000 $358,000 0 $ 58,000 0 0 3 7 9% $83,000 $53,000 4 10 12% $473,000 $473,000 $15,000 $ 30,000 $15,000 $ 35,000 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.)
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. EVA 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 6 10% $58,000 $58,000 2 Situation 9 11% $358,000 $358,000 0 $ 58,000 0 0 3 7 9% $83,000 $53,000 4 10 12% $473,000 $473,000 $15,000 $ 30,000 $15,000 $ 35,000 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.)
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
Residual Value
Guarantee
$
1
5,000
0
0
2
6
10%
$58,000 $358,000 $83,000
$58,000
$358,000
$53,000
$
PV of Lease
Payments
Situation
9
11%
$ 58,000
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.)
58,000
3
7
9%
4
PV of Residual
Value Guarantee
10
12%
$473,000
$473,000
$15,000 $ 30,000
$15,000 $ 35,000
$
$
$
$
Right-of-use
Asset/Lease
Liability
58,000
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Febb19d67-a802-4101-8c02-c8d58d89880d%2Fa086e7f4-d5e2-4701-ae57-131055cc1a8f%2F91acel_processed.jpeg&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
Residual Value
Guarantee
$
1
5,000
0
0
2
6
10%
$58,000 $358,000 $83,000
$58,000
$358,000
$53,000
$
PV of Lease
Payments
Situation
9
11%
$ 58,000
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.)
58,000
3
7
9%
4
PV of Residual
Value Guarantee
10
12%
$473,000
$473,000
$15,000 $ 30,000
$15,000 $ 35,000
$
$
$
$
Right-of-use
Asset/Lease
Liability
58,000
0
0
0
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