Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value Situation 1 Situation 2 Situation 3 Situation 4 Lease Payments $ $ 1 Residual Value Guarantee 18,613 $ 164 $ $50,000 $50,000 4 10% 0 0 0 $ 0 $ 2 Situation PV of Lease Payments 7 11% $ 50,000 $350,000 $75,000 $350,000 $45,000 0 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. (Round your answers to the nearest whole dollar amount.) 3 5 9% 50,000 $ 350,000 $ 4 $465,000 $465,000 PV of Residual Value Guarantee $ 7,000 $ 45,000 $ 7,000 $ 50,000 0 0 8 12% $ $ $ GA Right-of-use Asset/Lease Liability 50,000 350,000 0 0
Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value Situation 1 Situation 2 Situation 3 Situation 4 Lease Payments $ $ 1 Residual Value Guarantee 18,613 $ 164 $ $50,000 $50,000 4 10% 0 0 0 $ 0 $ 2 Situation PV of Lease Payments 7 11% $ 50,000 $350,000 $75,000 $350,000 $45,000 0 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. (Round your answers to the nearest whole dollar amount.) 3 5 9% 50,000 $ 350,000 $ 4 $465,000 $465,000 PV of Residual Value Guarantee $ 7,000 $ 45,000 $ 7,000 $ 50,000 0 0 8 12% $ $ $ GA Right-of-use Asset/Lease Liability 50,000 350,000 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
domestic
Transcribed Image Text:Lease term (years)
Lessor's rate of return
Fair value of lease asset
Lessor's cost of lease asset
Residual value:
Estimated fair value
Guaranteed fair value
Situation 1
Situation 2
Situation 3
Situation 4
Lease Payments
$
$
1
Residual Value
Guarantee
18,613 $
164 $
$50,000
$50,000
4
10%
0
0
0 $
0 $
2
Situation
PV of Lease
Payments
7
11%
$ 50,000
$350,000 $75,000
$350,000
$45,000
0
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. (Round your answers to the nearest whole dollar amount.)
3
5
9%
50,000 $
350,000 $
4
$465,000
$465,000
PV of Residual
Value Guarantee
$ 7,000
$ 45,000
$ 7,000 $ 50,000
0
0
8
12%
$
$
$
GA
Right-of-use
Asset/Lease
Liability
50,000
350,000
0
0
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