Question

Each of the four independent situations below describes a sales-type lease in which annual lease payments of $165.000 are payable at the beginning of each year. Each is a finance lease for the lessee. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of S1 and PVAD OF 51) (Use appropriate factor(s) from the tables provided.) Situation 101 Lease ten years) Lessors and lessee's interest rate Residual values Estimated fair value Guaranteed by lessee $63,000 $9,300 $9,300 $63,000 $73,000 Determine the following amounts at the beginning of the lease (Round your intermediate and final answer to the nearest whole dollar amount.): Answer is complete but not entirely correct. Situation 1. Lease payments 2. Gross investment in the lease t in the lease The lessee's 4 Lease payments S990,000 990,000 790,480 S 990,000 1,053,000 791,706 $ 1,155,000 1,164,300 910,264 1.228,000 1.228,000 879,869 5 Right-of-use asset 990,000 790,480 790,480 990,000 759,788 759,788 1,155,000 905,177 905,177 1.228,000 879,869 879,869 6. Lease payable

Answer 1

Page No 0 Answer ④. The Situation! lessons 5 10% hease payments = $165000 x 6 - $990,000 Groms investments in lease = Lease payments t estimated train value 990,000 + 0 = $990,000 Net investment in the lease = [--C14 107) x 165000 + 165000 = 625480 + 165000 = 790480 Situation 2 Lease payments = 165000 x 6 = $990,000 190,000 Gross investments in Lease = 990,000.+ 63000 = $1053000 Alet investment in the lease = {1+(1+12 7)° x 165000 + 165000 it [cat nanjo *6.2001 5594788+ (65000 + 31918 * :

= $491706 Page No ③ ܠܫܐܘ Lease payments - 165000 x 7 = $1155000 +9300 = $1164300 Groos investments in lease = 1155000 + 9300 + 9300 = $1164300 +9300 = $113600 Net investment in the lease - [1-(+9%) x 165000 + 165000 than any osoby 3 740174 + 165000 + 10175 = $ 915352 Situation h Lease payments = 165000 X 7 + 73000 - $1228000 Gross investments in lease = 1228000 + 63000 :.= $1291000 Met onverhonent in the lease = [=(n=172) Spiero + 165000 163000) tl (+11%) X /360001 ff 72000 L=136000

Page No ③ silualion = 698039 + 165000 + 65506 = $ 928545 ® The Sexscenes Shu Lease payments = 165000 X 6 - $990,000 Situation d, lease paymento = 165000 x6 şíliction 3, lease payments = [165oco x7) + 9300" = $1164300 asiliation 4, lease payments = Nyt + $ 73000 (165000 X 7)+4 = $1228000 asiliation ! Right to use g'asset - lease. liability = by - 10% = 625480 + 165000 .$ 790480 Silication? 11-lition) X 165000/+165000 .. Right to use of aned = lease lisbility - [4 –Clit 1875" x 650) 15000 L 12% - 594788 + 165000 "

Page. No 4 = $759488 situation 3 Right to vos gyl anat a lease lisbility – [=(1+27) 105000) + 165000 + Lichten, 3 17300 - 40177 +165000 + 5087 = $910264 situation 4 Right to use of conet - Soose liability = (--(44 175 x 185000) + 16500 + [ctw = 698039 + (65000 + 35161 = $ 898200 Situation Situation 2 situation 3 Sitüation y The lessons O Lease payments 990,000990,000 1164300 1228000 @Gross investment in lease 990,000 1053000 1173600 1291000 Net investment in least 990480 791906 915352 928545 a lease payments 1 990,000 990,000 1164300 1228000 Right of use aset 1790.480 759788910269 | 898.200 @ Lease payable 1 790480 759788 910267 | 898200 ]