Each of the four independent situations below describes a sales-type lease in which annual lease payments of $165,000 are payable 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. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Lease term (years) Lessor's and lessee's interest rate Residual value: Estimated fair value Guaranteed by lessee 91 6 10% 0 0 Situation 2 6 12% $63,000 0 3 7 9% $9,300 $9,300 7 11% $63,000 $73,000
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $165,000 are payable 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. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Lease term (years) Lessor's and lessee's interest rate Residual value: Estimated fair value Guaranteed by lessee 91 6 10% 0 0 Situation 2 6 12% $63,000 0 3 7 9% $9,300 $9,300 7 11% $63,000 $73,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Each of the four independent situations below describes a sales-type lease in which annual lease
payments of $165,000 are payable 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, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the
tables provided.)
Lease term (years)
Lessor's and lessee's interest rate
Residual value:
Estimated fair value
Guaranteed by lessee
A The lessor's:
B
1. Lease payments
2. Gross investment in the lease
3. Net investment in the lease
The lessee's:
4. Lease payments
5. Right-of-use asset
6. Lease payable
$
1
1
6
10%
0
0
990,000
790,480
790,480
Determine the following amounts at the beginning of the lease (Round your intermediate and final
answer to the nearest whole dollar amount.):
2
990,000 $ 990,000
990,000
790,480
Situation
2
6
12%
Situation
990,000
759,789
759,789
$63,000 $9,300
0
$9,300
3
7
9%
3
1,155,000
905,177
905,177
4
7
11%
4
$1,218,000
$1,155,000
1,053,000 1,164,300 1,228,000
791,706
910,264
$63,000
$73,000
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