A company will lease equipment, starting December 31 year 0. Lease payments are paid one year...

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A company will lease equipment, starting December 31 year 0. Lease payments are paid one year in advance. The lease contract is for five years (year 0-4), with a final payment performed at the end of the lease term, December 31 year 4. Use the solution supplement and the factors presented below to show the accounting of the lease transactions, in line with the rules for financial lease. Year Prerequisite Lease payments (in advance 31/12) Guranteed residual value (payable 31/12) Interest Depreciation 4 years, 25%/year Calculation, year PV-factor 0 400 0 1,0000 1 400 5,0% 25% 1 0,9524 2 400 3 400 5,0% 5,0% 25% 25% 2 3 0,9070 0,8638 4 0 800 5,0% 25% 4 0,8227 A company will lease equipment, starting December 31 year 0. Lease payments are paid one year in advance. The lease contract is for five years (year 0-4), with a final payment performed at the end of the lease term, December 31 year 4. Use the solution supplement and the factors presented below to show the accounting of the lease transactions, in line with the rules for financial lease. Year Prerequisite Lease payments (in advance 31/12) Guranteed residual value (payable 31/12) Interest Depreciation 4 years, 25%/year Calculation, year PV-factor 0 400 0 1,0000 1 400 5,0% 25% 1 0,9524 2 400 3 400 5,0% 5,0% 25% 25% 2 3 0,9070 0,8638 4 0 800 5,0% 25% 4 0,8227

Answer rating: 100% (QA)

Calculation of Lease Liability Year payment 0 1 2 400 400 09524 400 09070 400 08638 800 08227 Presen... View the full answer