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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vinubhai
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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