Calculate minimum lease payments for A Ltd. who took an asset on a 5 years lease from B Ltd. using the following information: Payments over the lease term Contingent rent Cost for services given by B Ltd. Taxes to be reimbursed to B Ltd. Residual value guaranteed by A Ltd. Fair value of asset after 5 years 1,000 per month *20,000 40,000 15,000 5,000 6,000 Also, A Ltd. has an option to purchase the asset after a period of 5 years at 2,000. It is reasonably certain that A Ltd. will exercise the option. Required Calculation Minimum Lease Payments.

Calculate minimum lease payments for A Ltd. who took an asset on a 5 years lease from B Ltd. using the following information: Payments over the lease term Contingent rent Cost for services given by B Ltd. Taxes to be reimbursed to B Ltd. Residual value guaranteed by A Ltd. Fair value of asset after 5 years 1,000 per month *20,000 40,000 15,000 5,000 6,000 Also, A Ltd. has an option to purchase the asset after a period of 5 years at 2,000. It is reasonably certain that A Ltd. will exercise the option. Required Calculation Minimum Lease Payments.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 9E: Lessor Accounting with Guaranteed Residual Value Use the information for Edom Company in E20-8,...

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