Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. tiner leasing company purchased specialized equipm

Tiner Leasing Company purchased specialized equipment from Fred Company on December 31, 2019 for $800,000. On the...

Free

80.2K

Verified Solution

Question

Accounting

Tiner Leasing Company purchased specialized equipment fromFred

Company on December 31, 2019 for $800,000. On the same date, itleased this equipment to Tears Company for 6 years, the useful lifeof the equipment. The lease payments begin January 1, 2020 and aremade every 6 months. Tiner Leasing wants to earn 9% annually on itsinvestment.

  

   (a) Calculate the amount of each rent. $__________

   (b) How much interest revenue will Tiner earn in2020? $ __________

Answer & Explanation Solved by verified expert
4.4 Ratings (937 Votes)

The Amount of each rent = $87,732.95

Interest revenue in the year 2020 (i.e.for first 2 periods) = $36000+$33672=$69,672

(Explanation to the answer is given below)

Period Payment Principal Part Interest Part Balance
1 $87,732.95 $ 51,732.95 $ 36,000.00 $748,267.05
2 $87,732.95 $ 54,060.93 $ 33,672.02 $694,206.12
3 $87,732.95 $ 56,493.67 $ 31,239.28 $637,712.45
4 $87,732.95 $ 59,035.89 $ 28,697.06 $578,676.56
5 $87,732.95 $ 61,692.51 $ 26,040.44 $516,984.05
6 $87,732.95 $ 64,468.67 $ 23,264.28 $452,515.38
7 $87,732.95 $ 67,363.76 $ 20,369.19 $385,145.62
8 $87,732.95 $ 70,401.40 $ 17,331.55 $314,744.22
9 $87,732.95 $ 73,569.46 $ 14,163.49 $241,174.76
10 $87,732.95 $ 76,880.09 $ 10,852.86 $164,294.67
11 $87,732.95 $ 80,339.69 $    7,393.26 $83,954.98
12 $87,732.95 $ 83,954.98 $    3,777.97 ($0.00)

The monthly payment is derived by using the formula EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

=>EMI= 800000*4.5%*((1+4.5%)^12)/((1+4.5%)^12-1)

=>$87,732.95
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

Chemistry
1.2K views

For molecule NF3- a) draw a full MO diagram. All F 2pz LGO are non-bonding. The...

Physics
1.2K views

THIS IS ASTR 100 1. The latitude of Seattle is 47 degrees north. How many degrees above...

Physics
1.2K views

HINT a Find the magnitude of the gravitational force in N between a planet with...

Algebra
1.2K views

Solve the logarithmic equation using properties loga x 10 3 Ox 54 O x 71

Accounting
1.2K views

#16. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{\begin{tabular}{l} Transaction \\ Beginning \end{tabular}} & \multicolumn{2}{|c|}{ Current Assets }...

Accounting
1.2K views

\begin{tabular}{|c|c|c|c|c|} \hline \multirow{3}{*}{\begin{tabular}{l} Year \\ Start \end{tabular}} &...

Accounting
1.2K views

Cox, North, and Lee form a partnership. Cox contributes $204,000, North contributes $170,000, and Lee...

Accounting
1.2K views

- Desprotion so06 Requirements 2. Buppone be ofustrents made of Geprevend 1 wese kit rub...

Accounting
1.2K views

Mauro Products sells a woven basket for $11 per unit. Its variable expense is $8...

Accounting
1.2K views

Exercise 5-4 (Part Level Submission) On June 10, Purcey Company purchased $6,900 of merchandise from...

Accounting
1.2K views

Unadjusted net income equals $8,000. Calculate what net income will be after the following adjustments:...

Finance
1.2K views

Synovec Company is growing quickly. Dividends are expected to grow at a rate of 20...