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 1 2 3 Lease term (years) Lessor's rate of return Fair value of lease asset 5 10% 8 11% 6 9% 9 12% $ 57,000 Lessor's cost of lease asset $ 57,000 $ 357,000 $ 357,000 $ 82,000 $ 52,000 $ 472,000 $ 472,000 е $ 57,000 $ 14,000 $ 29,000 $ 14,000 $ 34,000 Residual value: Estimated fair value Guaranteed fair value 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.
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 1 2 3 Lease term (years) Lessor's rate of return Fair value of lease asset 5 10% 8 11% 6 9% 9 12% $ 57,000 Lessor's cost of lease asset $ 57,000 $ 357,000 $ 357,000 $ 82,000 $ 52,000 $ 472,000 $ 472,000 е $ 57,000 $ 14,000 $ 29,000 $ 14,000 $ 34,000 Residual value: Estimated fair value Guaranteed fair value 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6]
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
1
2
3
4
Lease term (years)
Lessor's rate of return
Fair value of lease asset
5
10%
8
11%
6
9%
9
12%
$ 57,000
$ 357,000
Lessor's cost of lease asset
$ 57,000
$ 357,000
$ 82,000
$ 52,000
$ 472,000
$ 472,000
0
$ 57,000
$ 14,000
$ 29,000
e
0
$ 14,000
$ 34,000
Residual value:
Estimated fair value
Guaranteed fair value
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.
Right-of-use
Lease Payments
Residual Value
Guarantee
PV of Lease
Payments
PV of Residual
Asset/Lease
Value Guarantee
Liability
Situation 1
S
13,669 $
0
$
57,000
$
0
Situation 2
$
24,734 $
0
$
0
Situation 3
$
0
$
0
Situation 4](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5ddb3f79-ecf6-4938-afa0-c089e84d40bc%2Fcc2e1e85-9b51-4e2c-9d8d-90669afcfe4d%2Fywzvf3v_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6]
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
1
2
3
4
Lease term (years)
Lessor's rate of return
Fair value of lease asset
5
10%
8
11%
6
9%
9
12%
$ 57,000
$ 357,000
Lessor's cost of lease asset
$ 57,000
$ 357,000
$ 82,000
$ 52,000
$ 472,000
$ 472,000
0
$ 57,000
$ 14,000
$ 29,000
e
0
$ 14,000
$ 34,000
Residual value:
Estimated fair value
Guaranteed fair value
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.
Right-of-use
Lease Payments
Residual Value
Guarantee
PV of Lease
Payments
PV of Residual
Asset/Lease
Value Guarantee
Liability
Situation 1
S
13,669 $
0
$
57,000
$
0
Situation 2
$
24,734 $
0
$
0
Situation 3
$
0
$
0
Situation 4
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