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Each of the four independent situations below describes a finance lease in which annual lease...

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Question

Accounting

Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessors implicit rate of return.
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)
Situation
1234
Lease term (years)5869
Lessor's rate of return 10%11%9%12%
Fair value of lease asset $ 51,000 $ 351,000 $ 76,000 $ 466,000
Lessor's cost of lease asset $ 51,000 $ 351,000 $ 46,000 $ 466,000
Residual value:
Estimated fair value 0 $ 51,000 $ 8,000 $ 46,000
Guaranteed fair value 00 $ 8,000 $ 51,000
Required:
a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations.

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