Homework Help is Here – Start Your Trial Now!
Business
Accounting
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. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD $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 i 5. Right-of-use asset 6. Lease liability 750,000 575,597 12% 2 750,000 575,597 575,597 50 $0 Determine the following amounts at the beginning of the lease. Note: Round your intermediate and final answers to the nearest whole dollar amount. Situation $ 750,000 $ 750,000 $ 875,000 805,000 883,500 598,849 673,770 750,000 Situations $ 55,000 50 6 10x 875,000 870,638 870,638 $ 0,500 $ 8,500 7 10% $875,000 940,000 685,125 875,000 848,509 848,509 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. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD $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 i 5. Right-of-use asset 6. Lease liability 750,000 575,597 12% 2 750,000 575,597 575,597 50 $0 Determine the following amounts at the beginning of the lease. Note: Round your intermediate and final answers to the nearest whole dollar amount. Situation $ 750,000 $ 750,000 $ 875,000 805,000 883,500 598,849 673,770 750,000 Situations $ 55,000 50 6 10x 875,000 870,638 870,638 $ 0,500 $ 8,500 7 10% $875,000 940,000 685,125 875,000 848,509 848,509 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
See similar textbooks
icon
Related questions
Question

A

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 $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 $ 750,000 $ 750,000 575,597 750,000 575,597 575,597 6 12% 2 $0 $0 Situation Determine the following amounts at the beginning of the lease. Note: Round your intermediate and final answers to the nearest whole dollar amount. 750,000 $ 805,000 598,849 750,000 2 3 Situation 6 10% $ 55,000 $8 875,000 870,638 870,638 3 $ 8,500 $ 8,500 875,000 $875,000 883,500 673,770 7 10% 940,000 685,125 875,000 848,509 848,509 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 $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 $ 750,000 $ 750,000 575,597 750,000 575,597 575,597 6 12% 2 $0 $0 Situation Determine the following amounts at the beginning of the lease. Note: Round your intermediate and final answers to the nearest whole dollar amount. 750,000 $ 805,000 598,849 750,000 2 3 Situation 6 10% $ 55,000 $8 875,000 870,638 870,638 3 $ 8,500 $ 8,500 875,000 $875,000 883,500 673,770 7 10% 940,000 685,125 875,000 848,509 848,509 4 7 11% $ 55,000 $ 65,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Lease accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS