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- Company A leases computer servers to Company B for five years. At the end of the five years, Company B will assume ownership of the servers. Company B will then send the servers to one of their international locations. Which finance lease classification test does the scenario represent? O Alternative use O Transfer of ownership O Lease term O Purchase optionSuppose you are a property owner and you are collecting rent for an apartment. The tenant has signed a one-year lease with $600 a month rent, payable in advance. Find the present value of the lease contract if the discount rate is 12% per year.what is the effective rent for a 6-year net lease with a fixed at $24/sf in which the landlord agrees to give the tenant one year free rent up front and pay for $7/sf worth of tenant improvements if the discount rate is 8%?
- ed: Calculate the yearly payment that Alexis will charge Edgar under this lease agreement if payments are made on 1/1 of each year, beginning 1/1/19. a. o. Prepare all journal entries that would be made by Alexis (lessor) during 2019 and 2020 relating to this lease. . Prepare all journal entries that would be made by Edgar (lessee) during 2019 and 2020 relating to this lease.Example A trader obtains an asset under a lease agreement from an Islamic bank. The asset has a fair value at the start of the contract of PKR 52,050 and is estimated to have an useful economic life of 3. The contract starts on 1 January Year 1 and lasts 3 years; the trader does not have the option to cancel the contract early. The trader will pay three equal yearly installments and the first payment made by the trader will be at the start of the contract. Furthermore, the trader will pay the residual value at the end of third year and will purchase the asset. The estimated value of the asset after 3 years is PKR 5100 and this is also the guaranteed minimum value of the asset at the end of year 3. The profit rate by the bank is 12%. Required: Calculate yearly payments and Islamic Bank’s profitA lessee has developed the following information regarding a lease contract, with payments due at the beginning of the period. Use this information to determine the amount at which the lease obligation will initially be recorded. Description Amount Present value Present value of total of annuity due amount Annual lease $4,500 S16.528 S14,258 payment Discount rate 6% Number of periods 4 Purchase option $300 S238 Group of answer choices: 18,000 14,495 16,528 14,258 18,300 16,766
- Suppose the forward contract is entered into at the price computed is $365.42 and 4 months later, the price of the asset is $325.45. The investor would like to evaluate her position with respect to any gain or loss accrued on the forward contract. The market value of the forward contract at this point in time from the perspective of the investor would be: a. -$39.97 b. -$19.57 c. $9.63 d. $19.57Adam leases a truck with an upfront payment of $1700 and monthly payments of $290. Assuming there are no additional charges, what will be the total cost of a 3- year lease? State your answer in terms of dollars, rounded to the nearest cent, but do not include a $ sign or the word "dollars" with your response.For which of the following conditions will the lessor classify a lease as a sales-type lease? a.The leased asset may be exchanged for a similar asset during the lease term. b.The present value of the sum of the lease payments is equal to or more than the fair value of the underlying asset. c.The lease term is less than one year. d.The lease term is half of the underlying asset’s economic life.
- For which of the following conditions will the lessor classify a lease as a sales-type lease? A. The present value of the sum of the lease payments is equal to or more than the fair value of the underlying asset. B. The lease term is half of the underlying asset's economic life. C.The lease term is less than one year. D. The leased asset may be exchanged for a similar asset during the lease term.A six-year lease can be renewed for two additional three-year periods, and it also can be terminated after only three years. How do the lessee and lessor decide the lease term to be used in accounting for the lease?Which of the following statements regarding the new accounting rules, which take effect in 2019, for leases is false? If the lease term is one year or longer, a liability must be recognized. If the lease term is less than one year, an asset must be recognized. The new lease accounting rules will result in more assets and liabilities being recognized on the balance sheet. Leasing will likely remain popular under the new lease accounting rules because leases do not require a large initial outlay of cash.
