er to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment Cash Payment Effective Interest Decrease in balance Outstanding Balance 83,943 1 12,000 12,000 71,943 2 12,000 6,475 5,525 66,418 3 12,000 5,978 6,022 60,396 4 12,000 5,436 6,564 53,832 5 12,000 4,845 7,155 46,677 6 12,000 4,201 7,799 38,8
er to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment Cash Payment Effective Interest Decrease in balance Outstanding Balance 83,943 1 12,000 12,000 71,943 2 12,000 6,475 5,525 66,418 3 12,000 5,978 6,022 60,396 4 12,000 5,436 6,564 53,832 5 12,000 4,845 7,155 46,677 6 12,000 4,201 7,799 38,8
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
- Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable.
|
Payment |
Cash |
Effective |
Decrease |
Outstanding Balance |
|||||
|
|
|
|
|
|
|
|
|
83,943 |
|
|
1 |
|
12,000 |
|
|
|
12,000 |
|
71,943 |
|
|
2 |
|
12,000 |
|
6,475 |
|
5,525 |
|
66,418 |
|
|
3 |
|
12,000 |
|
5,978 |
|
6,022 |
|
60,396 |
|
|
4 |
|
12,000 |
|
5,436 |
|
6,564 |
|
53,832 |
|
|
5 |
|
12,000 |
|
4,845 |
|
7,155 |
|
46,677 |
|
|
6 |
|
12,000 |
|
4,201 |
|
7,799 |
|
38,878 |
|
|
7 |
|
12,000 |
|
3,499 |
|
8,501 |
|
30,377 |
|
|
8 |
|
12,000 |
|
2,734 |
|
9,266 |
|
21,111 |
|
|
9 |
|
12,000 |
|
? |
|
? |
|
? |
|
|
10 |
|
12,000 |
|
? |
|
? |
|
? |
|
What is the outstanding balance after payment 9? (Round your answer to the nearest whole dollar.)
- $6,828.
- $16,602.
- $6,000.
- $11,011.
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