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Each of the four independent situations below describes a sales-type lease in which annual lease payments of $125,000 are payable at the beginning of each year. Each is a finance lease for the lessee. 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 and lessee's interest rate Residual value: Estimated fair value Guaranteed by lessee 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 6 12% 2 $0 $0 Situation 2 Situation 3 6 10% $ 55,000 $0 Determine the following amounts at the beginning of the lease. Note: Round your intermediate and final answers to the nearest whole dollar amount. 3 7 10% $ 8,500 $ 8,500 4 7. 11% $ 55,000 $ 65,000

Each of the four independent situations below describes a sales-type lease in which annual lease payments of $125,000 are payable at the beginning of each year. Each is a finance lease for the lessee. 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 and lessee's interest rate Residual value: Estimated fair value Guaranteed by lessee 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 6 12% 2 $0 $0 Situation 2 Situation 3 6 10% $ 55,000 $0 Determine the following amounts at the beginning of the lease. Note: Round your intermediate and final answers to the nearest whole dollar amount. 3 7 10% $ 8,500 $ 8,500 4 7. 11% $ 55,000 $ 65,000

FINANCIAL ACCOUNTING
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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Each of the four independent situations below describes a sales-type lease in which annual lease payments of $125,000 are payable at the beginning of each year. Each is a finance lease for the lessee. 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 and lessee's interest rate Residual value: Estimated fair value Guaranteed by lessee 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 6 12% 2 $0 $0 Situation 2 Situation 3 6 10% $ 55,000 $0 Determine the following amounts at the beginning of the lease. Note: Round your intermediate and final answers to the nearest whole dollar amount. 3 7 10% $ 8,500 $ 8,500 4 7. 11% $ 55,000 $ 65,000
Transcribed Image Text:Each of the four independent situations below describes a sales-type lease in which annual lease payments of $125,000 are payable at the beginning of each year. Each is a finance lease for the lessee. 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 and lessee's interest rate Residual value: Estimated fair value Guaranteed by lessee 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 6 12% 2 $0 $0 Situation 2 Situation 3 6 10% $ 55,000 $0 Determine the following amounts at the beginning of the lease. Note: Round your intermediate and final answers to the nearest whole dollar amount. 3 7 10% $ 8,500 $ 8,500 4 7. 11% $ 55,000 $ 65,000
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