M-a-k-e- -a- -d-e-t-a-i-l-e-d- -s-o-l-u-t-i-o-n- -a-n-d- -e-x-p-l-a-n-a-t-i-o-n- -o-f- -h-o-w- -e-v-e-r-y- -o-f- -t-h-a-t- -a-m-o-u-n-t- -g-o-t- Automobile Lease vs. Purchase Costs AnalysisLEASE1. Initial DescriptionItem Descriptiona. Down payment (capital cost reduction)b. Security deposit2. Terms of lease and loan (years)3. Term of lease and loan (months) (item 2 x 12)4. Monthly lease payment5. Total payments over the term of the lease (item 3 x item 4)6. Interest rate earned on savings (in decimal form)7. Opportunity cost of initial payment (item 1 x item 2 x item 6)8. Payment/refund for market value adjustment at the end of the lease(P0 for closed-end leases) &/or estimated end-of-term charges9. Total cost of leasing (item 1a + item 5 + item 7 + item 8)PURCHASEItem Description10. Purchase price11. Down payment12. Sales tax rate (in decimal form)13. Sales tax (item 10 x item 12)14. Monthly loan payment (terms: 18.500_, 48 months, 7%)15. Total payments over the term of the loan (item 3 x item 14)16. Opportunity cost of down payment (item 2 x item 6 x item 11)17. Estimated value of the car at the end of the loan18. Total cost of purchasing (item 11 + item 13 + item 15 + item 16-item 17)2,200.00500.00Amount22,000.003,500.000.051,100.00443.0121,264.27560.0012,100.0012,324.27Amount2,700.00448350.0016,800.000.040432.000.0019,432.00

A lease is a contract wherein one party offers another party the right to use real estate or other…

Answered: 1. Initial Description Item Description…

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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Use the following data: Purchase Costs Leasing Costs Down payment: $4,800 Security deposit: $1,600 Loan payment: $1,440 for 48 months Lease payment: $1,440 for 48 months Estimated value at end of loan: $5,100 End-of-lease charges: $765 Opportunity cost interest rate: 2 percent Calculate the costs of buying versus leasing a motor vehicle. Cost of buying $ Cost of leasing $
Show the solution in good accounting form. Thank you! 1. What is the total amount of interest revenue will FOUR earn over the term of the lease? a. ₱ 75,000 b. ₱ 51,600 c. ₱ 129,360 d. ₱ 139,450 2. At what amount should the lease receivable be initially recognized? a. ₱ 323,400 b. ₱ 278,900 c. ₱ 1,617,000 d. ₱ 375,000
Debt Service Coverage Ratio (DSCR or DCR): Assume that a property has a monthly net operating income (NOI) of $25,000, and that a lender has a minimum DSCR requirement of 1.35. What is the maximum loan that you could obtain assuming a 4.5% interest rate and a 30-year term with monthly payments?
3. What is the total financial or interest revenue over the lease term? ₱ 1,439,100 ₱ 1,379,156 ₱ 1,558,538 ₱ 1,498,594 4. How much is the gross investment that should be initially recognized as lease receivable? ₱ 4,000,000 ₱ 3,840,150 ₱ 3,000,000 ₱ 4,140,056
Automobile leases are built around three factors: negotiated sales price, residual value, and interest rate. The residual value is what the dealership expects the car’s value will be when the vehicle is returned at the end of the lease period. The monthly cost of the lease is the capital recovery amount determined by using these three factors. Solve, (a) Determine the monthly lease payment for a car that has an agreed-upon sales price of $34,995, an APR of 9% compounded monthly, and an estimated residual value of $20,000 at the end of a 36-month lease.∗ An up-front paymentof $3,000 is due when the lease agreement (contract) is signed. (b) If the estimated residual value is raised to $25,000 by the dealership to get yourbusiness, how much will the monthly payment be?
44. Subject :- Accounting is it correct? To calculate the total cost of leasing a hybrid vehicle for 5 years, we need to consider the monthly lease payment and the down payment. Here's the breakdown: Lease Payment: Monthly Lease Payment: $80 Lease Term: 5 years (60 months) Total Lease Payments: $80/month * 60 months = $4,800 Down Payment: Down Payment: $3,000 Total Cost of Lease: Total Cost of Lease = Total Lease Payments + Down Payment Total Cost of Lease = $4,800 + $3,000
In Intermediate Accounting by Whalen on Cengage, chapter 20, homework question 4, how do you calculate the selling price? Sale type lease for 8 years. Lease pmt due at the end of the year $32,000/yr. 14% interest. Cost of the equipment is $110,000 and estimate fair value at the end of the lease is $20,000.
Based on the following, calculate the costs of buying versus leasing a motor vehicle. Purchase Costs Leasing Costs Down payment: $1,500 Security deposit: $500 Loan payment: $450 for 48 months Lease payment: $450 for 36 months Estimated value at end of loan: $4,000 End-of-lease charges: $600 Opportunity cost interest rate: 4 percent
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…
Purchase Costs Down payment $2,100 Loan payment $530 for 36 months Estimated value at end of loan $4,900 Opportunity cost interest rate 7 percent Leasing Costs Security deposit $1,410 Lease payment $520 for 36 months End of lease charges $1,430 Based on the costs listed in the table above, calculate the costs of buying and of leasing a motor vehicle. Note: Round your answers to the nearest whole number. find total purchase cost and total leasing cost.
Needed: 1. Determine the total financial income that will be recognised over the lease period. 2. Calculate the new implicit rate that will be utilised in the interest income calculation. 3. Prepare journal entries for the current year in the AEI Company's books.
What is the proper accounting treatment to record a variable lease payment indexed off the CPI? Group of answer choices Record the lease liability based on highest annual increase in the CPI for the past 10 years. Calculate the lease liability based on the base payment and debit an additional expense in subsequent years based on the change in the CPI. Calculate the lease liability based on expected payments over the life of the lease after considering increases in the CPI. Capitalize and depreciate the increased payments based on CPI indexing.

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