Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. each of the four independent situations below desc

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

80.2K

Verified Solution

Question

Accounting

image

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 lessor's implicit rate of return. (FV of $1, PV of $1, FVA of $1, PVA of $1 FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Situation Lease term (years) Lessor's rate of return 10 11% 93 128 Fair value of lease asset $53,000 353,000 $78,000 $468,000 Lessor's cost of lease asset $53,000 353,000 $48,000 $468,000 Residual value: Estimated fair value 0 $ 53,000 $10,000 48,000 0 $10,000 $ 53,000 Guaranteed fair value 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 above situations. (Round your PV factor answers to 5 decimal places and other answer to nearest whole dollar.) Right-of-use Residual Value Guarantee PV of Lease PV of Residual Lease Payments Payments Value Guarantee Liabili Situation 1 Situation 2 Situation 3 Situation 4

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students