None Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginningof each year. The lessee is aware of the lessor's implicit rate of return.Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1)Situation234Lease term (years)Lessor's rate of returnFair value of lease asset410%711%519%812%$ 50,000$ 350,000$ 75,000Lessor's cost of lease asset$ 50,000$ 350,000$ 45,000$ 465,000$ 465,000Residual value:Estimated fair value0$ 50,000$ 7,000$ 45,000Guaranteed fair value00$ 7,000$ 50,000Required:a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as aright-of-use asset and a lease liability, for each of the above situations.Note: Round your answers to the nearest whole dollar amount.Lease PaymentsResidual ValueGuaranteePV of LeasePaymentsPV of ResidualValue GuaranteeRight-of-useAsset/LeaseLiabilitySituation 1$14,340$50,000Situation 2$62,310$325,917Situation 3Situation 4

A lease is defined as a contractual agreement incorporated between two business entities where one…

Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. EVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) Lease term (years) Lessor's rate of return Fair value of lease asset Situation 2 3 10% 7 11% 5 9% 8 12% $ 50,000 $ 350,000 Lessor's cost of lease asset $ 50,000 $ 350,000 $ 75,000 $ 45,000 $ 465,000 $ 465,000 Residual value: $ 50,000 $ 7,000 $ 45,000 0 $ 7,000 $ 50,000 Estimated fair value Guaranteed fair value Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest whole dollar amount.

Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. EVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) Lease term (years) Lessor's rate of return Fair value of lease asset Situation 2 3 10% 7 11% 5 9% 8 12% $ 50,000 $ 350,000 Lessor's cost of lease asset $ 50,000 $ 350,000 $ 75,000 $ 45,000 $ 465,000 $ 465,000 Residual value: $ 50,000 $ 7,000 $ 45,000 0 $ 7,000 $ 50,000 Estimated fair value Guaranteed fair value Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest whole dollar amount.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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