Marin Company leases an automobile with a fair value of $16,513 from John...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Marin Company leases an automobile with a fair value of $16,513 from John Simon Motors, Inc., on the following terms: 1. 2. 3. Non-cancelable term of 50 months. Rental of $340 per month (at the beginning of each month). (The present value at 0.5% per month is $8,873.) Marin guarantees a residual value of $1,420 (the present value at 0.5% per month is $920). Delaney expects the probable residual value to be $1,420 at the end of the lease term. Estimated economic life of the automobile is 60 months. Marins incremental borrowing rate is 6% a year (0.5% a month). Simon's implicit rate is unknown. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) Your answer is correct. What is the nature of this lease to Marin? The nature of this lease is a/an finance lease. What is the present value of the lease payments to determine the lease liability? (Round answer to 0 decimal places, e.g. 5,275.) Present value of the lease payments $ e Textbook and Media List of Accounts Save for Later Attempts: 1 of 3 used Submit
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!
