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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. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD 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 Answer is complete but not entirely correct. Right-of-use Asset/Lease Payable 660,000 1,040,000 245,000 Situation 1 $ Situation 2 $ Situation 3 Lease Payments 107,412 105,927 78,971 10 10% 110 $660,000 $ Situation 20 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. 81 94 $1,040,000 114 10% $245,000

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. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD 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 Answer is complete but not entirely correct. Right-of-use Asset/Lease Payable 660,000 1,040,000 245,000 Situation 1 $ Situation 2 $ Situation 3 Lease Payments 107,412 105,927 78,971 10 10% 110 $660,000 $ Situation 20 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. 81 94 $1,040,000 114 10% $245,000

FINANCIAL ACCOUNTING
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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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. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Situation Lease term (years) Lessor's rate of return (known by lessee) Lensee's incremental borrowing rate Fair value of lease annet Answer is complete but not entirely correct. Right-of-use Asset/Lease Payable 660,000 1,040,000 245,000 Situation 1 $ Situation 2 $ Situation 31 $ Lease Payments 107,412 105,927 78,971 10 10% 118 $660,000 $ $ $ 20 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. 84 91 $1,040,000 114 10% $245,000
Transcribed Image Text: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. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Situation Lease term (years) Lessor's rate of return (known by lessee) Lensee's incremental borrowing rate Fair value of lease annet Answer is complete but not entirely correct. Right-of-use Asset/Lease Payable 660,000 1,040,000 245,000 Situation 1 $ Situation 2 $ Situation 31 $ Lease Payments 107,412 105,927 78,971 10 10% 118 $660,000 $ $ $ 20 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. 84 91 $1,040,000 114 10% $245,000
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