Here is a lease amortization schedule for Jedi Corporation, the lessee. The asset being leased: a High-speed
Question:
Here is a lease amortization schedule for Jedi Corporation, the lessee.
The asset being leased: a High-speed R2D2 unit | ||
Initial lease obligation | ?? | |
Annual lease payments | 30,000 | Payable at lease beginning and at beginning of each subsequent year. |
Annual interest rate | ?? | |
Payments per year | 1 | |
Number of years for lease | 10 | |
The useful life of the asset | 12 years | No expected residual value at the end of 12 years. |
Bargain purchase option | 5,000 | Exercisable at end of the lease. |
Lease Payment | Periodic Payment | Effective Interest | Decrease in Balance | Outstanding Balance | |||
?? | |||||||
1 | 30,000 | ?? | ?? | 181,970 | |||
2 | 30,000 | 16,377 | 13,623 | 168,347 | |||
3 | 30,000 | 15,151 | 14,849 | 153,498 | |||
4 | 30,000 | 13,815 | 16,185 | 137,313 | |||
5 | 30,000 | 12,358 | 17,642 | 119,671 | |||
6 | 30,000 | 10,770 | 19,230 | 100,441 | |||
7 | 30,000 | 9,040 | 20,960 | 79,481 | |||
8 | 30,000 | 7,153 | 22,847 | 56,634 | |||
9 | 30,000 | 5,097 | 24,903 | 31,731 | |||
10 | ?? | ?? | ?? | ?? | |||
11 | ?? | 413 | 4,587 | ?? | |||
Total interest over the term of lease ??
Annual straight-line amortization on the right-of-use asset ??
Required:
(a) Calculate the effective interest and the decrease in balance for the first lease payment.
(b) Calculate the initial lease obligation above.
(c) Calculate the annual amortization amount.
(d) Calculate the annual interest rate.
(e) Calculate the missing amounts for rows for payments 10 and 11.
(f) Calculate the total effective interest over the term of the lease.
Calculate the effective interest and the decrease in balance for the first lease payment. Calculate the initial lease obligation above. Calculate the annual amortization amount. Calculate the annual interest rate. (Round "Annual amortization amount" to the nearest whole dollar amount and round your "Annual interest rate" to the nearest whole number.)
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Calculate the missing amounts for rows for payments 10 and 11. (Round your answers to the nearest whole dollar amounts.)
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Calculate the total effective interest over the term of the lease. (Round your answer to the nearest whole dollar amounts.)
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Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield