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28 Sep 2019
Each of the three independent situations below describes acapital lease in which annual lease payments are payable at thebeginning of each year. The lessee is aware of the lessorâsimplicit 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) fromthe tables provided.)
Situation 1 2 3 Lease term(years) 15 25 5 Lessorâs rate ofreturn (known by lessee) 11% 9% 12% Lesseeâs incrementalborrowing rate 12% 10% 11% Fair value of leasedasset $740,000 $1,120,000 $325,000
Required:
a. Determine the amount of the annual lease payments as calculatedby the lessor and above situations.
Lease Payments
Situation 1:
Situation 2:
Situation 3:
b. Determine the amount lessee would record as a leased asset and alease liability for above situations.
Lease Asset/ Lease Liability
Situation 1:
Situation 2:
Situation 3:
Each of the three independent situations below describes acapital lease in which annual lease payments are payable at thebeginning of each year. The lessee is aware of the lessorâsimplicit 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) fromthe tables provided.) |
Situation | |||
1 | 2 | 3 | |
Lease term(years) | 15 | 25 | 5 |
Lessorâs rate ofreturn (known by lessee) | 11% | 9% | 12% |
Lesseeâs incrementalborrowing rate | 12% | 10% | 11% |
Fair value of leasedasset | $740,000 | $1,120,000 | $325,000 |
Required: |
a. | Determine the amount of the annual lease payments as calculatedby the lessor and above situations. Lease Payments |
Situation 1: Situation 2: Situation 3: |
b. | Determine the amount lessee would record as a leased asset and alease liability for above situations. |
Lease Asset/ Lease Liability Situation 1: Situation 2: Situation 3: |
Hubert KochLv2
28 Sep 2019