On January 1, 20X1, Babson, Inc., leased two automobiles for executive use. The lease requires Babson to make five annual payments of $13,000, beginning January 1, 20X1. At the end of the lease term on December 31, 20X5, Babson guarantees that the residual value of the automobiles will total $10,000. The lease qualifies as a finance lease. The interest rate implicit in the lease is 9%. Use tables (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided. Round your intermediate calculations and final answers to the nearest whole dollar.) Required: Compute Babson's recorded finance lease liability both at inception and immediately after the first required payment. Answer is complete but not entirely correct. Recorded finance lease liability at inception Recorded finance lease liability after the first payment Amount $ 61,616 $ 52,991

On January 1, 20X1, Babson, Inc., leased two automobiles for executive use. The lease requires Babson to make five annual payments of $13,000, beginning January 1, 20X1. At the end of the lease term on December 31, 20X5, Babson guarantees that the residual value of the automobiles will total $10,000. The lease qualifies as a finance lease. The interest rate implicit in the lease is 9%. Use tables (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided. Round your intermediate calculations and final answers to the nearest whole dollar.) Required: Compute Babson's recorded finance lease liability both at inception and immediately after the first required payment. Answer is complete but not entirely correct. Recorded finance lease liability at inception Recorded finance lease liability after the first payment Amount $ 61,616 $ 52,991

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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