Ivanhoe Leasing Company agrees to lease equipment to Shamrock Corporation on January 1, 2020. The following information relates to the lease agreement. 1.   The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2.   The cost of the machinery is $517,000, and the fair value of the asset on January 1, 2020, is $657,000. 3.   At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $55,000. Shamrock estimates that the expected residual value at the end of the lease term will be 55,000. Shamrock amortizes all of its leased equipment on a straight-line basis. 4.   The lease agreement requires equal annual rental payments, beginning on January 1, 2020. 5.   The collectibility of the lease payments is probable. 6.   Ivanhoe desires a 10% rate of return on its investments. Shamrock’s incremental borrowing rate is 11%, and the lessor’s implicit rate is unknown. (Assume the accounting period ends on December 31.)

On December 31, 2019, Marin Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Marin to make annual payments of $8,566 at the beginning of each year of the lease, starting December 31, 2019. The machine has an estimated useful life of 6 years and a $4,500 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Marin uses the straight-line method of depreciation for all of its plant assets. Marin’s incremental borrowing rate is 4%, and the lessor’s implicit rate is unknown.Click here to view factor tables. https://education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf   a)     Compute the present value of the lease payments. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places e.g. 5,275.) Present value of the lease payments   $enter the Present value…

Glaus Leasing Company agrees to lease equipment to Jensen Corporation on January 1, 2020. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $525,000, and the fair value of the asset on January 1, 2020, is $700,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $50,000. Jensen estimates that the expected residual value at the end of the lease term will be $50,000. Jensen amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020. 5. The collectibility of the lease payments is probable. 6. Glaus desires a 5% rate of return on its investments. Jensen's incremental borrowing rate is 6%, and the lessor's implicit rate is unknown. Instructions (Assume the accounting period ends on…

Turner Company signs a lease agreement on January 1, 2024, to lease equipment to Holmgren Company. The term of the non-cancelable lease is 5 years, and annual payments are required at the beginning of each year. The following information relates to this agreement. -Holmgren has the option to purchase the equipment for $11,000 upon termination of the lease. It is reasonably certain that Holmgren will exercise this option (i.e. it is a bargain purchase). - The equipment has a cost of $118,000 and fair value of $186,000 to Turner. Its useful economic life is 10 years. What annual rental amount will Williamson charge if it desires to earn a return of 7% on its investment?