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required: . & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a ight-of-use asset and a lease liability, for each of the above situations. (Round your answers to the nearest whole dollar amount.) Situation 1 Situation 2 Situation 3 Situation 4 Lease Payments Residual Value Guarantee PV of Lease Payments PV of Residual Value Guarantee Right-of-use Asset/Lease Liability

required: . & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a ight-of-use asset and a lease liability, for each of the above situations. (Round your answers to the nearest whole dollar amount.) Situation 1 Situation 2 Situation 3 Situation 4 Lease Payments Residual Value Guarantee PV of Lease Payments PV of Residual Value Guarantee Right-of-use Asset/Lease Liability

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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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. (FV of $1. PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 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 6 10% ++ 2 Situation Residual Value PV of Lease Guarantee Payments 9 11% 0 $ 58,000 0 3 $58,000 $358,000 $83,000 $58,000 $358,000 $53,000 7 9% 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.) 4 10 12% PV of Residual Value Guarantee $473,000 $473,000 $15,000 $ 30,000 0 $15,000 $ 35,000 Right-of-use Asset/Lease Liability
Transcribed Image Text: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. (FV of $1. PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 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 6 10% ++ 2 Situation Residual Value PV of Lease Guarantee Payments 9 11% 0 $ 58,000 0 3 $58,000 $358,000 $83,000 $58,000 $358,000 $53,000 7 9% 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.) 4 10 12% PV of Residual Value Guarantee $473,000 $473,000 $15,000 $ 30,000 0 $15,000 $ 35,000 Right-of-use Asset/Lease Liability
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