BLCK PNK is deciding to purchase or lease an automatic casting machine that will cost 15000, to be depreciated straight-line basis over a 5-year period. tax=50%. actual expected salvage value is 2100. maintenance & insurance expenses= 1000. todd co can borrow funds at before-tax rate of 8%. lease details: lease payment = 4200 required: (39)PV of cost of owning, (40)PV of cost of leasing, NAL, and decision

BLCK PNK is deciding to purchase or lease an automatic casting machine that will cost 15000, to be depreciated straight-line basis over a 5-year period. tax=50%. actual expected salvage value is 2100. maintenance & insurance expenses= 1000. todd co can borrow funds at before-tax rate of 8%. lease details: lease payment = 4200 required: (39)PV of cost of owning, (40)PV of cost of leasing, NAL, and decision

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 2P

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Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2024. Edison purchased the equipment from International Machines at a cost of $119,300. 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) Related Information: Lease term Quarterly rental payments Economic life of asset. Fair value of asset Implicit interest rate (Also lessee's incremental borrowing 2 years (8 quarterly periods) $ 16,500 at the beginning of each period years $ 119,300 2 12% rate) Required: Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2025. Edison's fiscal year ends December 31. Complete this question by entering your answers in the tabs below. Amortization Schedule General Journal Prepare a lease amortization schedule for Edison Leasing from the beginning of the lease through January 1, 2025. Edison's fiscal year ends…
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Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2024. Edison purchased the equipment from International Machines at a cost of $135.990. Note: Use tables, Excel, or a financial calculator. (EV of $1., PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Related Information: Lease term Quarterly rental payments Economic life of asset Fair value of asset Implicit interest rate (Also lessee's incremental borrowing rate) 2 years (8 quarterly periods) at the beginning of each period years $ 18,200 2 $ 135,990 Required: Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2025. Amortization is recorded at the end of each fiscal year (December 31) on a straight-line basis. Amortization General Schedule Journal Complete this question by entering your answers in the tabs below. Record the appropriate entries for Manufacturers Southern from the beginning of…
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Broncos Company leased equipment from Wilson-Tech Leasing on January 1, 2022.Other information:Lease term 3 yearsAnnual payments $40,000 on January 1 each yearLife of asset 3 yearsImplicit interest rate 8%There is no expected residual value.Required: 1. Using the Excel (not formula or PV tables), compute the amount of Right-of-Use Asset as the present value of future lease payments. Explain how you compute this PV. 2. Prepare appropriate journal entries for Broncos for 2022. Assume straight-line amortization and a December 31 year-end. Round your answers to the nearest whole dollar amounts.January 1, 2022: December 31, 2022:
Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2024. Edison purchased the equipment from International Machines at a cost of $131,379. 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) Related Information: Lease term Quarterly rental payments Economic life of asset 2 years (8 quarterly periods) $ 17,000 2 at the beginning of each period years $ 131,379 Implicit interest rate (Also 4% Fair value of asset lessee's incremental borrowing rate) Required: Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1. 2025. Edison's fiscal year ends December 31. Complete this question by entering your answers in the tabs below. Amortization Schedule General Journal