Question

CALCULATOR MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION BACK Problem 21A-1 a-c (Part Level Submission) The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Coronado Company, a lessee. Commencement date January 1, 2017 Annual lease payment due at the beginning of each year, beginning with January 1, 2017 $110,459 Residual value of equipment at end of lease term, guaranteed by the lessee $50,000 Expected residual value of equipment at end of lease term $45,000 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, 2017 $626,000 Lessor's implicit rate 5 % Lessee's incremental borrowing rate 5 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Click here to view the factor table. (a) Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to o decimal places.e.g. 5,275.) CORONADO COMPANY (Lessee) Lease Amortization Schedule Annual Lease Interest on Reduction of Lease Payment Plus GRV Liability Liability Date Lease Liability

Answer 1

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Numbers can be rounded +/- $1. e.g. 47619 or 47620: Solution: Date 1/1/17 1/1/17 1/1/18 1/1/19 1/1/20 1/1/21 1/1/22 1/1/22 BED*5% C = (A-B) D = (D-C) Lease pmt Interest Reduction Lease liability 626000 110459 110459 515541 110459 25777 84682 4 30859 110459 88916 341943 110459 17097 93362 248581 110459 12429 98030 150551 110459 47620 50000 2381 47620 712754 86755 626000