FOUR Inc. leases computer equipment to customers under a direct financing lease. The equipment has no residual value at the end of the lease and the leases do not contain bargain purchase options. FOUR wishes to earn 8% interest on a 5-year lease of equipment with a fair value of P323,400. The present value of an annuity due of 1 at 8% for 5 years is 4.312.

FOUR Inc. leases computer equipment to customers under a direct financing lease. The equipment has no residual value at the end of the lease and the leases do not contain bargain purchase options. FOUR wishes to earn 8% interest on a 5-year lease of equipment with a fair value of P323,400. The present value of an annuity due of 1 at 8% for 5 years is 4.312.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Bhr.6
A7
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, FVAD of $1 and PVAD of $1) Situation 1 2 3 4 Lease term (years) Lessor's rate of return Fair value of lease asset 5 10% 8 11% 6 9% 9 12% $ 57,000 $ 357,000 Lessor's cost of lease asset $ 57,000 $ 357,000 $ 82,000 $ 52,000 $ 472,000 $ 472,000 0 $ 57,000 $ 14,000 $ 29,000 e 0 $ 14,000 $ 34,000 Residual value: Estimated fair value Guaranteed fair value 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…
6. What is the total interest that must be paid by the maker if the term of credit is 5% of Php 20,000 due 3 months from the time the amount was borrowed?
Find the exact interest on ₱16,800 for 105 days at 8.15% simple interest.
1
3. Consider the buyer of a FRA 6-9. The contract rate is 6.35% on a notional amount of $10 million. Calculate the settlement amount of the seller if the settlement rate is 6.85%. Assume a 30/360 day count basis.
Da
Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for AugustPrepare an income statement according to the variable costing concept
A 92.
Do not give image format
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…