Controller Accounting Exercise

Given the following information on a customer lease:

$-$ Vehicle Purchase Price: $$50,000$

$-$ Customer Initial Upfront Payment: $5\%$ of purchase price

$-$ Monthly Rent: $$900$

$-$ Term: $24$ months

$-$ Value at end of term: $70\%$ of purchase price

$-$ Customer guaranteed residual value at end of term: YES $/$ NO

Please provide for each scenario of customer guaranteed residual value:

$-$ Analysis of lease accounting determination

$-$ Monthly Income Statement, Balance Sheet, Cashflow statement for relevant line items to the

customer lease.