The annual rent payable for recovery of fair value of the asset. Given information: Lease term is 4 years. Economic life of asset is 4 years. Fair value of the asset is $232,511. Carrying value of asset is $200,000. Interest rate is 8% Residual value guaranteed by lessee is $15,000. Annual lease payments are $65,000 due on Jan/1 each year

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Answer 1

Question

Chapter 18, Problem 18.3P

a.

To determine

The annual rent payable for recovery of fair value of the asset.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

b.

To determine

The present value of lease payments.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

c.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

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Answer 2

Question

Chapter 18, Problem 18.3P

a.

To determine

The annual rent payable for recovery of fair value of the asset.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

b.

To determine

The present value of lease payments.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

c.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

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Answer 3

Question

Chapter 18, Problem 18.3P

a.

To determine

The annual rent payable for recovery of fair value of the asset.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

b.

To determine

The present value of lease payments.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

c.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

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Answer 4

Question

Chapter 18, Problem 18.3P

a.

To determine

The annual rent payable for recovery of fair value of the asset.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

b.

To determine

The present value of lease payments.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

c.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

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Answer 5

Chapter 18, Problem 18.3P

a.

To determine

The annual rent payable for recovery of fair value of the asset.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

b.

To determine

The present value of lease payments.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

c.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

Answer 6

Chapter 18, Problem 18.3P

a.

To determine

The annual rent payable for recovery of fair value of the asset.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

Answer 7

Chapter 18, Problem 18.3P

a.

To determine

The annual rent payable for recovery of fair value of the asset.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

Answer 8

b.

To determine

The present value of lease payments.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

Answer 9

b.

To determine

The present value of lease payments.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

Answer 10

c.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

Answer 11

c.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Residual value guaranteed by lessee is $15,000.

Annual lease payments are $65,000 due on Jan/1 each year

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 18 - Does the lessee become the owner of the equipment...Ch. 18 - Prob. 18.2Q Ch. 18 - Prob. 18.3Q Ch. 18 - Prob. 18.4Q Ch. 18 - Prob. 18.5Q Ch. 18 - Prob. 18.6Q Ch. 18 - Prob. 18.7Q Ch. 18 - Prob. 18.8Q Ch. 18 - Prob. 18.9Q Ch. 18 - Prob. 18.10Q

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Chapter 18 Solutions