Each of the four independent situations below describes a sales-type lease in which annual lease payments aat the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1,$1) (Use appropriate factor(s) from the tables provided.)Situation123Lease term (years)778Lessor's and lessee's interest rateResidual value:81289811%10%Estimated fair value0$50,000$8,000$50,000Guaranteed by lessee00$8,000$60,000Determine the following amounts at the beginning of the lease. (Round your intermediate and final answersdollar amount.)Situation2AThe lessor's:1. Lease payments2. Gross investment in the lease3. Net investment in the leaseThe lessee's:4. Lease payments5. Right-of-use asset6. Lease payableB

Lease is the amount of rent for the property in the business use.

Each of the four independent situations below describes a sales-type lease in which annual lease paymen at the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1) (Use appropriate factor(s) from the tables provided.) Situation 2 7 7 8 Lease term (years) Lessor's and Residual value: lessee's interest rate 8 12% 98 118 10% $50,000 Estimated fair value. Guaranteed by lessee $8,000 $50,000 $8,000 $60,000 0 Determine the following amounts at the beginning of the lease. (Round your intermediate and final answe dollar amount.) Situation A The lessor's: 1. Lease payments 2. Gross investment in the lease 3. Net investment in the lease The lessee's: 4 Lease payments B 2

Each of the four independent situations below describes a sales-type lease in which annual lease paymen at the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1) (Use appropriate factor(s) from the tables provided.) Situation 2 7 7 8 Lease term (years) Lessor's and Residual value: lessee's interest rate 8 12% 98 118 10% $50,000 Estimated fair value. Guaranteed by lessee $8,000 $50,000 $8,000 $60,000 0 Determine the following amounts at the beginning of the lease. (Round your intermediate and final answe dollar amount.) Situation A The lessor's: 1. Lease payments 2. Gross investment in the lease 3. Net investment in the lease The lessee's: 4 Lease payments B 2

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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Gadubhai
am. 101.
Hardev
Visno
Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. 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 rate of return (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset Situation 11 Situation 2 Situation 3 Lease Payments 10 11% 12% Right-of-use Asset/Lease Payable $780,000 Situation 20 9% 10% $1,150,000 3 Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest whole dollar. 6 12% 11% $365,000
Each of the four independent situations below describes a finance lease in which annual lease payments are pay- able at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. Situation Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value 1 4 10% $50,000 $50,000 0 2 7 11% $350,000 $350,000 $ 50,000 0 3 5 9% $75,000 $45,000 $7,000 $7,000 Required: For each situation, determine: a. The amount of the annual lease payments as calculated by the lessor. b. The amount the lessee would record as a right-of-use asset and a lease liability. 4 8 12% $465,000 $465,000 10 $ 45,000 $ 50,000
Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end of each year. The lessee is aware of the lessor's implicit rate of return. 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 rate of return (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset Situation 1 Situation 2 Situation 3 Lease Payments Right-of-use Asset/Lease 1 Payable 10 10% 11% $780,000 Situation 2 15 8% 9% $1,070,000 Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest whole dollar. 3 5 11% 10% $275,000
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Check my work mode: This shows what is correct or in Each of the four independent situations below describes a sales-type lease in which annual leas the beginning of each year. Each is a finance lease for the lessee. (FV of $1. PV of $1. EVA of $1. (Use appropriate factor(s) from the tables provided.) Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed Purchase option: After (years). Exercise price Reasonably certain? Situation 1 2 3 4 4 4 4 4 4 5 5 7 11% 11% 11% 11% $4,000 $2,000 e 0 е $2,000 $ 4,000 none 3 4 3 n/a $ 7,000 $1,000 $3,000 n/a no no yes Determine the following amounts at the beginning of the lease: (Round your final answers to nee Answer is complete but not entirely correct. Situation 1 2 3 4 A The lessor's: 1 Total lease payments $ 40,000 $ 44,000 S 42,000 $ 33,000 2 Gross investment in the lease 40,000 44,000 44,000 37,000 × 3. Net investment in the lease 34,437 37,072 37,072 32,244…
am. 127.
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