Each of the four independent situations below describes a sales-type lease in which annual lease payments of $16,500 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed Purchase option: Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability 1 $ 82,500 82,500 66,616 82,500 66,616 66,616 Answer is not complete. 2 Situation 82,500 89,100 70,361 5 5 12% 82,500 $0 3 After (years) Exercise price Reasonably certain? $ 4,300 yes 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) none 3 82,500 89,100✔ 70,361 2 82,500 Situation 5 6 12% $ 6,600 $0 4 $ 8,300 no 53,800 3 47,446 47,446 5 6 12% $ 3,300 $ 3,300 5 8 12% 5 $ 2,300 no $0 $ 6,600

Each of the four independent situations below describes a sales-type lease in which annual lease payments of $16,500 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed Purchase option: Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability 1 $ 82,500 82,500 66,616 82,500 66,616 66,616 Answer is not complete. 2 Situation 82,500 89,100 70,361 5 5 12% 82,500 $0 3 After (years) Exercise price Reasonably certain? $ 4,300 yes 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) none 3 82,500 89,100✔ 70,361 2 82,500 Situation 5 6 12% $ 6,600 $0 4 $ 8,300 no 53,800 3 47,446 47,446 5 6 12% $ 3,300 $ 3,300 5 8 12% 5 $ 2,300 no $0 $ 6,600

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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