Each of the four independent situations below describes a finance lease in which annual lease payments are payable atthe 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, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)Situation1Lease term (years)Lessor's rate of returnFair value of lease asset $ 61,000 $361,000 $86,000Lessor's cost of lease asset$ 61,000 $361,000 $ 56,000Residual value:$61,000Estimated fair valueGuaranteed fair value410%3004711%59%812%$ 476,000$ 476,000$18,000 $ 30,0000 $ 18,000 $ 35,000Required:a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee wouldrecord 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.

A lease is a legally binding contract in which one party commits to rent a property that belongs to…

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, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Situation 2 Lease term (years) Lessor's rate of return Fair value of lease asset $61,000 Lessor's cost of lease asset$ 61,000 Residual value: Estimated fair value. Guaranteed fair value 4 10% 0 0 3 7 11% 4 5 9% $361,000 $86,000 $361,000 $ 56,000 $ 61,000 $ 18,000 0 $ 18,000 8 12% $ 476,000 $ 476,000 $ 30,000 $ 35,000 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, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Situation 2 Lease term (years) Lessor's rate of return Fair value of lease asset $61,000 Lessor's cost of lease asset$ 61,000 Residual value: Estimated fair value. Guaranteed fair value 4 10% 0 0 3 7 11% 4 5 9% $361,000 $86,000 $361,000 $ 56,000 $ 61,000 $ 18,000 0 $ 18,000 8 12% $ 476,000 $ 476,000 $ 30,000 $ 35,000 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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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, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Situation 1 2 3 4 Lease term (years) 5 8 6 9 Lessor's rate of return 10% 11% 9% 12% Fair value of lease asset $ 65,000 $ 365,000 $ 90,000 $ 480,000 Lessor's cost of lease asset $ 65,000 $ 365,000 $ 60,000 $ 480,000 Residual value: Estimated fair value 0 $ 65,000 $ 22,000 $ 34,000 Guaranteed fair value 0 0 $ 22,000 $ 39,000 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. I have got all answers except…
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