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 $14,000 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed. Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's 4. Total lease payments 5. Right-of-use asset 6. Lease liability $ 1 42,000 2 Situation 1 42,000 3 3 12% $0 $0 3 Purchase option: After (years) Exercise price Reasonably certain? $ 3,800 yes Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) none 3 42,000 Situation 4 12% $ 5,600 $0 2 $ 7,800 no 4 12% $ 2,800 $ 2,800 4 3 $ 1,800 no 4 7 12% $0 $ 5,600 Each of the four independent situations below describes a sales-type lease in which annual lease payments of $14,000 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed. Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's 4. Total lease payments 5. Right-of-use asset 6. Lease liability $ 1 42,000 2 Situation 1 42,000 3 3 12% $0 $0 3 Purchase option: After (years) Exercise price Reasonably certain? $ 3,800 yes Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) none 3 42,000 Situation 4 12% $ 5,600 $0 2 $ 7,800 no 4 12% $ 2,800 $ 2,800 4 3 $ 1,800 no 4 7 12% $0 $ 5,600