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. (FV of $1, PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Lease term (years) Lessor's rate of return. Fair value of lease asset Lessor's cost of lease asset. Residual value: Estimated fair value Guaranteed fair value 6 10% Situation 0 0 9 11% $58,000 $358,000 $58,000 $358,000 $ 58,000 0 3 7 9% $ 83,000 $53,000 $ 15,000 $15,000 4 10 12% $473,000 $473,000 $ 30,000 $ 35,000 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. (Round your answers to the nearest whole dollar amount.)
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. (FV of $1, PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Lease term (years) Lessor's rate of return. Fair value of lease asset Lessor's cost of lease asset. Residual value: Estimated fair value Guaranteed fair value 6 10% Situation 0 0 9 11% $58,000 $358,000 $58,000 $358,000 $ 58,000 0 3 7 9% $ 83,000 $53,000 $ 15,000 $15,000 4 10 12% $473,000 $473,000 $ 30,000 $ 35,000 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. (Round your answers to the nearest whole dollar amount.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 9E: Lessor Accounting with Guaranteed Residual Value Use the information for Edom Company in E20-8,...
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