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On September 1, 2024, a company decides to lease a new delivery truck for three years. The truck dealership offers the company the following options, with the first monthly lease payment beginning September 30, 2024: 1. Pay $0 down and monthly lease payments of $2.000. 2. Pay $20,000 down and monthly lease payments of $1,300. 3. Pay $40,000 down and monthly lease payments of $600. Required: 1. For each option, calculate the present value of the lease payments using an interest rate of 5%. Round to the nearest whole dollar. (Hint: Use a financial calculator or Excel) 2. Record each lease on September 1, 2024. 3. For which option is the lease asset recorded for the highest amount? (Hint: Include any down payment in determining your answer)

On September 1, 2024, a company decides to lease a new delivery truck for three years. The truck dealership offers the company the following options, with the first monthly lease payment beginning September 30, 2024: 1. Pay $0 down and monthly lease payments of $2.000. 2. Pay $20,000 down and monthly lease payments of $1,300. 3. Pay $40,000 down and monthly lease payments of $600. Required: 1. For each option, calculate the present value of the lease payments using an interest rate of 5%. Round to the nearest whole dollar. (Hint: Use a financial calculator or Excel) 2. Record each lease on September 1, 2024. 3. For which option is the lease asset recorded for the highest amount? (Hint: Include any down payment in determining your answer)

FINANCIAL ACCOUNTING
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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On September 1, 2024, a company decides to lease a new delivery truck for three years. The truck dealership offers the company the following options, with the first monthly lease payment beginning September 30, 2024: 1. Pay $0 down and monthly lease payments of $2.000. 2. Pay $20,000 down and monthly lease payments of $1,300. 3. Pay $40,000 down and monthly lease payments of $600. Required: 1. For each option, calculate the present value of the lease payments using an interest rate of 5%. Round to the nearest whole dollar. (Hint: Use a financial calculator or Excel.) 2. Record each lease on September 1, 2024. 3. For which option is the lease asset recorded for the highest amount? (Hint: Include any down payment in determining your answer.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each option, calculate the present value of the lease payments using an interest rate of 5%. Round to the nearest whole dollar. (Hint: Use a financial calculator or Excel.) (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Option 1 Option 2 Option 3 S View transaction list Show Transcribed Text 1 Required 31 (27,597) Journal entry worksheet 2 3 Date Record three-year monthly lease with zero down. Note: Enter debits before credits. September 01, 2024 Record entry < Required 1 General Journal Clear entry S Required 2 > Debit Credit View general Journal >
Transcribed Image Text:On September 1, 2024, a company decides to lease a new delivery truck for three years. The truck dealership offers the company the following options, with the first monthly lease payment beginning September 30, 2024: 1. Pay $0 down and monthly lease payments of $2.000. 2. Pay $20,000 down and monthly lease payments of $1,300. 3. Pay $40,000 down and monthly lease payments of $600. Required: 1. For each option, calculate the present value of the lease payments using an interest rate of 5%. Round to the nearest whole dollar. (Hint: Use a financial calculator or Excel.) 2. Record each lease on September 1, 2024. 3. For which option is the lease asset recorded for the highest amount? (Hint: Include any down payment in determining your answer.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each option, calculate the present value of the lease payments using an interest rate of 5%. Round to the nearest whole dollar. (Hint: Use a financial calculator or Excel.) (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Option 1 Option 2 Option 3 S View transaction list Show Transcribed Text 1 Required 31 (27,597) Journal entry worksheet 2 3 Date Record three-year monthly lease with zero down. Note: Enter debits before credits. September 01, 2024 Record entry < Required 1 General Journal Clear entry S Required 2 > Debit Credit View general Journal >
View transaction list Journal entry worksheet 1 22 3 < Record three-year monthly lease with $20,000 down. Note: Enter debits before credits. Date September 01, 2024 Record entry » Show Transcribed Text View transaction list < Journal entry worksheet 1 2 Note: Enter debits before credits. Date General Journal Record three-year monthly lease with $40,000 down. September 01, 2024 Clear entry Record entry General Journal 3 Clear entry c Debit Credit View general journal Debit > unu your unania w e nearest who Gullar.) Credit View general journal
Transcribed Image Text:View transaction list Journal entry worksheet 1 22 3 < Record three-year monthly lease with $20,000 down. Note: Enter debits before credits. Date September 01, 2024 Record entry » Show Transcribed Text View transaction list < Journal entry worksheet 1 2 Note: Enter debits before credits. Date General Journal Record three-year monthly lease with $40,000 down. September 01, 2024 Clear entry Record entry General Journal 3 Clear entry c Debit Credit View general journal Debit > unu your unania w e nearest who Gullar.) Credit View general journal
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