only typed solution Each of the four independent situations below describes a finance lease in which annual leasepayments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rateof return. Note: Use tables, Excel, or a financial calculator. (FV of S1, PV of $1, FVA of S1, PVA of $1,FVAD of $1 and PVAD of S1) Situation 1 2 3 4 Lease term (years) 5 8 6 9 Lessor's rate of return10% 11% 9% 12% Fair value of lease asset $ 51,000 $ 351,000 $ 76,000 $ 466,000 Lessor's cost oflease asset $ 51,000 $ 351,000 $ 46,000 $ 466,000 Residual value: Estimated fair value 0 $ 51,000 $8,000 $ 46,000 Guaranteed fair value 0 0 $ 8,000 $ 51,000 Required: a. & b. Determine the amountof the annual lease payments as calculated by the lessor and the amount the lessee would record asa right-of-use asset and a lease liability, for each of the above situations. Note: Round youranswers to the nearest whole dollar amount.

A lease is an agreement that occurs between the two parties , one is lessor and the other is…

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.

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

only typed solution

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 S1, PV of $1, FVA of S1, PVA of $1,
FVAD of $1 and PVAD of S1) Situation 1 2 3 4 Lease term (years) 5 8 6 9 Lessor's rate of return
10% 11% 9% 12% Fair value of lease asset $ 51,000 $ 351,000 $ 76,000 $ 466,000 Lessor's cost of
lease asset $ 51,000 $ 351,000 $ 46,000 $ 466,000 Residual value: Estimated fair value 0 $ 51,000 $
8,000 $ 46,000 Guaranteed fair value 0 0 $ 8,000 $ 51,000 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.

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