Each of the four independent situations below describes a sales-type lease in which annual lease payments...
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Each of the four independent situations below describes a sales-type lease in which annual lease payments of $175,000 are payable at the beginning of each year. Each is a finance lease for the lessee. (EV of $1, PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Situation 2 4 Lease term (years) Lessor's and lessee's interest rate Residual value: 8 8 9 12% 14% 10% 11% $65,000 $9,500 $9,500 $65,000 $75,000 Estimated fair value Guaranteed by lessee Determine the following amounts at the beginning of the lease: (Round your intermediate and final answer to the nearest whole dollar amount.) Situation 1 2 3 A The lessor's: 1. Total lease payments 2. Gross investment in the S 1,400,000 $1,400,000 $ 1,575,000 1,585,000 1,400,000 1,465,000 1,584,500 0 1,650,000 lease 3. Net investment in the lease 973,657 948,239 1,014,785 8 1,104,890 B The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability 1,650,000 8 1,014,785 O 1,104,890 1,014,785 X 1,104,890 1,400,000 1,400,000 1,575,000 973,657 925,453 973,657 925,453 Each of the four independent situations below describes a sales-type lease in which annual lease payments of $175,000 are payable at the beginning of each year. Each is a finance lease for the lessee. (EV of $1, PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Situation 2 4 Lease term (years) Lessor's and lessee's interest rate Residual value: 8 8 9 12% 14% 10% 11% $65,000 $9,500 $9,500 $65,000 $75,000 Estimated fair value Guaranteed by lessee Determine the following amounts at the beginning of the lease: (Round your intermediate and final answer to the nearest whole dollar amount.) Situation 1 2 3 A The lessor's: 1. Total lease payments 2. Gross investment in the S 1,400,000 $1,400,000 $ 1,575,000 1,585,000 1,400,000 1,465,000 1,584,500 0 1,650,000 lease 3. Net investment in the lease 973,657 948,239 1,014,785 8 1,104,890 B The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability 1,650,000 8 1,014,785 O 1,104,890 1,014,785 X 1,104,890 1,400,000 1,400,000 1,575,000 973,657 925,453 973,657 925,453
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Answer rating: 100% (QA)
ReqA The Lessors Situation Particulars 1 2 3 4 Lease payments 1400000 1400000 1584500 1650000 Gross ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson, Wayne Thomas
Posted Date:
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