Give me three steps solution and explanation. Headland Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Sage Medical Center for a period of 10years. The normal selling price of the machine is $528,109, and its guaranteed residual value at the end of the non-cancelable leaseterm is estimated to be $15,000. The hospital will pay rents of $64,000 at the beginning of each year. Headland incurred costs of$263,000 in manufacturing the machine and $14,200 in legal fees directly related to the signing of the lease. Headland hasdetermined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Sage Medical Center hasan incremental borrowing rate of 5% and an expected residual value at the end of the lease of $10,000.Discuss the nature of this lease in relation to the lessee.The nature of this lease in relation to the lessee isCompute the amount of the initial lease liability. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the finalanswer to O decimal places e.g. 5,275.)Initial Lease Liability$

Step 1: to get the value of lease liability in the POV of the lessee. We must get the sum of the…

Answered: Headland Inc. manufactures an X-ray…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 3P

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Amirante Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $495,678, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $15,000. The hospital will pay rents of $60,000 at the beginning of each year. Amirante incurred costs of $300,000 in manufacturing the machine and $14,000 in legal fees directly related to the signing of the lease. Amirante has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Instructions a. Discuss the nature of this lease in relation to the lessor and compute the amount of each of the following items. 1. Lease receivable at commencement of the lease. 2. Sales price. 3. Cost of sales. b. Prepare a 10-year lease amortization schedule for Amirante, the lessor. c. Prepare all of the lessor's journal entries for the first…
Amirante Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $495,678, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $15,000. The hospital will pay rents of $60,000 at the beginning of each year. Amirante incurred costs of $300,000 in manufacturing the machine and $14,000 in legal fees directly related to the signing of the lease. Amirante has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Chambers Medical Center has an incremental borrowing rate of 5% and an expected residual value at the end of the lease of $10,000 What is the initial lease liability?
Cullumber Inc manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $505,456. and its guaranteed residual value at the end of the non- cancelable lease termis estimated to be $16,400. The hospital will pay rents of $61,100 at the beginning of each year. Cullumber incurred costs of $227,000 in manufacturing the machine and $13400 in legal fees directly related to the signing of the lease. Cullumber has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Discuss the nature of this lease in relation to the lessor. The nature of this lease in relation to the lessor is Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answers to 0 decimai places, eg. 5,275.) (1) Lease receivable at commencement of the lease (2) Sales price…
PLEASE PROVIDE CORRECT ANSWER AND I WILL LIKE YOUR ANSWER. Indigo Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Sweet Medical Center for a period of 10 years. The normal selling price of the machine is $503,479, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $14,500. The hospital will pay rents of $61,000 at the beginning of each year. Indigo incurred costs of $225,000 in manufacturing the machine and $14,600 in legal fees directly related to the signing of the lease. Indigo has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Sweet Medical Center has an incremental borrowing rate of 5% and an expected residual value at the end of the lease of $10,000.
Crane SA manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is R$594,813, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be R$18,000. The hospital will pay rents of R$72,000 at the beginning of each year. Crane incurred R$410,000 in manufacturing cost and R$14,200 in legal fees directly related to the signing of the lease. Crane has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%. Click here to view factor tables. Discuss the nature of this lease in relation to the lessor. The nature of this lease in relation to the lessor is Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to O decimal places, e.g. 5,275.) (1) (2) (3) Lease receivable at commencement of the…
5...new Indigo Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $524,166, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $16,500. The hospital will pay rents of $63,400 at the beginning of each year. Indigo incurred costs of $258,000 in manufacturing the machine and $14,900 in legal fees directly related to the signing of the lease. Indigo has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%.Click here to view factor tables. (a) Discuss the nature of this lease in relation to the lessor.The nature of this lease in relation to the lessor is .Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places,…
Crane Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to Cheyenne Airlines for a period of 10 years. The normal selling price of the equipment is $252,640, and its unguaranteed residual value at the end of the lease term is estimated to be $21,300. Cheyenne will pay annual payments of $37,500 at the beginning of each year. Crane incurred costs of $173,900 in manufacturing the equipment and $3,900 in sales commissions in closing the lease. Crane has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 11%. Cheyenne Airlines has an incremental borrowing rate of 11%. Click here to view factor tables. (a) Your Answer Correct Answer (Used) Your answer is correct. Discuss the nature of this lease in relation to the lessee. This is a finance lease Compute the amount of the initial lease liability. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer…
Sunland Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to Coronado Airlines for a period of 10 years. The normal selling price of the equipment is $291,687, and its unguaranteed residual value at the end of the lease term is estimated to be $20,800. Coronado will pay annual payments of $43,500 at the beginning of each year. Sunland incurred costs of $164,300 in manufacturing the equipment and $4,300 in sales commissions in closing the lease. Sunland has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 11%. Coronado Airlines has an incremental borrowing rate of 11%. Click here to view factor tables. (a) Discuss the nature of this lease in relation to the lessee. This is a Compute the amount of the initial lease liability. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to O decimal places eg. 58,971) The amount of the initial lease…
Bridgeport Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to Indigo Airlines for a period of 10 years. The normal selling price of the equipment is $281,987, and its unguaranteed residual value at the end of the lease term is estimated to be $21,100. Indigo will pay annual payments of $42,000 at the beginning of each year. Bridgeport incurred costs of $193,400 in manufacturing the equipment and $3,800 in sales commissions in closing the lease. Bridgeport has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 11%. Indigo Airlines has an incremental borrowing rate of 11%.
Kingbird Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $304,659, and its unguaranteed residual value at the end of the lease term is estimated to be $19.400. National will pay annual payments of $40,800 at the beginning of each year. Kingbird incurred costs of $164,100 in manufacturing the equipment and $3,900 in sales commissions in closing the lease. Kingbird has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 8%. Click here to view factor tables. (a) Discuss the nature of this lease in relation to the lessor. This is a sales-type lease Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answers to O decimal places, eg. 5.275) (1) Lease receivable S (2) Sales price S (3) Cost of sales $
5..new a Indigo Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $524,166, and its guaranteed residual value at the end of the non-cancelable lease term is estimated to be $16,500. The hospital will pay rents of $63,400 at the beginning of each year. Indigo incurred costs of $258,000 in manufacturing the machine and $14,900 in legal fees directly related to the signing of the lease. Indigo has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 5%.Click here to view factor tables. (a) Discuss the nature of this lease in relation to the lessor.The nature of this lease in relation to the lessor is (what answer do you put here ????) .Compute the amount of each of the following items. (Round present value factor…
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