Each of the four independent situations below describes a sales-type lease in which annual lease payments of $18,000 are payable at the beginning of each year Each is a finance lease for the lessee. EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Use appropriate factor(s) from the tables provided.) Situation Lease tere (years) Asset's useful life (years) Lessor's inplicit rate (known by lessee) Residual value Guaranteed by lessee Unguaranteed Purchase options After (years) Exercise price Reasonably certain? 10% $7,200 $3,600 $3,600 $7,200 none $8,600 $2,600 $4,600 no no yes

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Each of the four independent situations below describes a sales-type lease in which annual lease payments of $18,000 are payable at
the beginning of each year. Each is a finance lease for the lessee. EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $)
(Use oppropriate foctor(s) from the tables provided.)
Situation
-2
4
Lease term (years)
Asset's useful life (years)
Lessor's implicit rate (known by lessee)
Residual value:
15
10%
10%
10%
10%
Guaranteed by lessee
Unguaranteed
Purchase option:
After (years)
Exercise price
Reasonably certain?
$7,200
$3,600
$3,600
$7, 200
4.
$8, 600
$ 2,600
none
n/a
n/a
$4,600
no
no
yes
Determine the following amounts at the beginning of the lease: (Round your final answers to nearest whole dollar.)
Situation
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
Transcribed Image Text:Each of the four independent situations below describes a sales-type lease in which annual lease payments of $18,000 are payable at the beginning of each year. Each is a finance lease for the lessee. EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $) (Use oppropriate foctor(s) from the tables provided.) Situation -2 4 Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: 15 10% 10% 10% 10% Guaranteed by lessee Unguaranteed Purchase option: After (years) Exercise price Reasonably certain? $7,200 $3,600 $3,600 $7, 200 4. $8, 600 $ 2,600 none n/a n/a $4,600 no no yes Determine the following amounts at the beginning of the lease: (Round your final answers to nearest whole dollar.) Situation 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
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