es Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6] Each of the four 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. EVAD of $1 and PVAD of $1) Situation 1 2 3 4 Lease term (years) 5 8 6 9 Lessor's rate of return Fair value of lease asset 8% 9% 7% 10% $ 55,000 $355,000 Lessor's cost of lease asset $ 55,000 $ 355,000 $ 80,000 $ 50,000 $470,000 $ 470,000 Residual value: Estimated fair value Guaranteed fair value 0 $ 55,000 $12,000 $50,000 0 0 $ 12,000 $ 55,000 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 amount. Lease Payments Residual Value Guarantee PV of Lease Payments PV of Residual Value Guarantee Right-of-use Asset/Lease Liability Situation 1 Situation 2 Situation 3 Situation 4
es Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6] Each of the four 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. EVAD of $1 and PVAD of $1) Situation 1 2 3 4 Lease term (years) 5 8 6 9 Lessor's rate of return Fair value of lease asset 8% 9% 7% 10% $ 55,000 $355,000 Lessor's cost of lease asset $ 55,000 $ 355,000 $ 80,000 $ 50,000 $470,000 $ 470,000 Residual value: Estimated fair value Guaranteed fair value 0 $ 55,000 $12,000 $50,000 0 0 $ 12,000 $ 55,000 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 amount. Lease Payments Residual Value Guarantee PV of Lease Payments PV of Residual Value Guarantee Right-of-use Asset/Lease Liability Situation 1 Situation 2 Situation 3 Situation 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6]
Each of the four 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. EVAD of $1 and PVAD of $1)
Situation
1
2
3
4
Lease term (years)
5
8
6
9
Lessor's rate of return
Fair value of lease asset
8%
9%
7%
10%
$ 55,000
$355,000
Lessor's cost of lease asset
$ 55,000
$ 355,000
$ 80,000
$ 50,000
$470,000
$ 470,000
Residual value:
Estimated fair value
Guaranteed fair value
0
$ 55,000
$12,000
$50,000
0
0
$ 12,000
$ 55,000
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 amount.
Lease Payments
Residual Value
Guarantee
PV of Lease
Payments
PV of Residual
Value Guarantee
Right-of-use
Asset/Lease
Liability
Situation 1
Situation 2
Situation 3
Situation 4](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3ab8357c-e018-490f-a708-daff830c8a55%2Ff68acd59-2af9-4840-ac21-339752f1657c%2Fqiolwen_processed.jpeg&w=3840&q=75)
Transcribed Image Text:es
Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6]
Each of the four 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. EVAD of $1 and PVAD of $1)
Situation
1
2
3
4
Lease term (years)
5
8
6
9
Lessor's rate of return
Fair value of lease asset
8%
9%
7%
10%
$ 55,000
$355,000
Lessor's cost of lease asset
$ 55,000
$ 355,000
$ 80,000
$ 50,000
$470,000
$ 470,000
Residual value:
Estimated fair value
Guaranteed fair value
0
$ 55,000
$12,000
$50,000
0
0
$ 12,000
$ 55,000
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 amount.
Lease Payments
Residual Value
Guarantee
PV of Lease
Payments
PV of Residual
Value Guarantee
Right-of-use
Asset/Lease
Liability
Situation 1
Situation 2
Situation 3
Situation 4
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