Converting Operating Leases to Capital Leases Apple Corporation discloses the following information about its noncancelable operating leases in its 2012 annual report. (in millions) 2013 $ 516 2014 556 2015 542 2016 513 2017 486 Thereafter 1,801 Total minimum lease payments $4,414 Assume that the payment amount in the “thereafter” row is all due at the end of 2018 and that the appropriate discount rate is 6 percent. What is the present value of Apple’s “total minimum lease payments” at the end of fiscal 2012?

Financial Accounting

9th Edition

ISBN: 9781259222139

Author: Robert Libby, Patricia Libby, Frank Hodge Ch

Publisher: McGraw-Hill Education

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

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Textbook Question

Chapter S, Problem 1P

Converting Operating Leases to Capital Leases

Apple Corporation discloses the following information about its noncancelable operating leases in its 2012 annual report.

*(in millions)*
2013	$ 516
2014	556
2015	542
2016	513
2017	486
Thereafter	1,801
Total minimum lease payments	$4,414

Assume that the payment amount in the “thereafter” row is all due at the end of 2018 and that the appropriate discount rate is 6 percent. What is the present value of Apple’s “total minimum lease payments” at the end of fiscal 2012?

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Chapter S, Problem 10E

Chapter S, Problem 2P

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Solution Summary: The author explains how to calculate the present value of minimum lease payments of Corporation A at the end of 2012.

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