Ghadubhai Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginningof 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 returnFair value of lease assetLessor's cost of lease assetResidual value:Estimated fair valueGuaranteed fair valueSituation 1Situation 2Situation 3Situation 4Lease Payments1610%++2SituationResidual Value PV of LeaseGuarantee Payments911%0 $ 58,00003$58,000 $358,000 $83,000$58,000$358,000$53,00079%Required:a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as aright-of-use asset and a lease liability, for each of the above situations. (Round your answers to the nearest whole dollar amount.)41012%PV of ResidualValue Guarantee$473,000$473,000$15,000 $ 30,0000 $15,000 $ 35,000Right-of-useAsset/LeaseLiability

Table Values:-Present value factor for n = 7 and i = 9% is 0.547 Present value of annuity due factor…

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

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 Residual Value Guarantee $ 1 5,000 0 0 2 6 10% $58,000 $358,000 $83,000 $58,000 $358,000 $53,000 $ PV of Lease Payments Situation 9 11% $ 58,000 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.) 58,000 3 7 9% 4 PV of…
Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end 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 (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset Situation 1 Situation 2 Situation 3 $ $ $ X Answer is not complete. Lease Payments 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.) 4,769,583 X 8,816,264 X 729,076 x 1 12 10% 11% $700,000 Right-of-use Asset/Lease Payable Situation 2 15 8% 9% $1,030,000 3 4 11% 10% $235,000
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Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end 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 (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset 1 10 Situation 1 Situation 2 Situation 3 Situation 2 20 10% 11% $730,000 $1,045,000 8% 9% 3 5 12% 11% $250,000 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. (Round your answers to the nearest whole dollar.) Lease Payments Right-of-use Asset/Lease Payable
D
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