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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 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 2 Answer is not complete. Situation 82,500 89,100 70,361 1 82,500 5 5 12% $0 $0 3 none Purchase option: After (years) Exercise price Reasonably certain? 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) 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 5 $ 2,300 no 8 12% $0 $ 6,600 3 $ 4,300 yes

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 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 2 Answer is not complete. Situation 82,500 89,100 70,361 1 82,500 5 5 12% $0 $0 3 none Purchase option: After (years) Exercise price Reasonably certain? 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) 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 5 $ 2,300 no 8 12% $0 $ 6,600 3 $ 4,300 yes

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 $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: 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 2 X Answer is not complete. Situation 1 5 5 12% Guaranteed by lessee Unguaranteed Purchase option: After (years) Exercise price Reasonably certain? 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) 82,500✔ 82,500 66,616✔ 66,616 ✔ 3 $0 $0 none 82,500✔ 82,500✔ 89,100✔ 89,100✔ 70,361✔ 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 4 5 $ 2,300 no 5 8 12% $0 $ 6,600 3 $ 4,300 yes
Transcribed Image Text: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: 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 2 X Answer is not complete. Situation 1 5 5 12% Guaranteed by lessee Unguaranteed Purchase option: After (years) Exercise price Reasonably certain? 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) 82,500✔ 82,500 66,616✔ 66,616 ✔ 3 $0 $0 none 82,500✔ 82,500✔ 89,100✔ 89,100✔ 70,361✔ 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 4 5 $ 2,300 no 5 8 12% $0 $ 6,600 3 $ 4,300 yes
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