ASAP On an annual renewable lease, the quarterly lease payment on office space$1600 payable in advance. What equivalent yearly payment made in advancewould satisfy the lease if interest is 6.6% compounded monthly?15575.37118575.37117575.37116575.371Dack

A lease can be referred to as a vehicle where the investor can use the asset by taking it on lease…

Answered: On an annual renewable lease, the…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 3P

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Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6 years at 2,000 per month or to purchase the equipment for 25,000 (a price considerably less than the expected fair value) after the initial lease term of 4 years. Why would this lease qualify as a finance lease?
Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would make in the first year of the lease assuming the lease is classified as a sales-type lease. Assume that the lessee is required to make payments on December 31 each year. Also assume that Richie had purchased the equipment at a cost of 200,000.
Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the first year of the lease assuming the lease is classified as a finance lease. However, assume that Garvey is now required to make the 65,949.37 payments on January 1 each year and that the fair value at the lease inception is now 275,000 (65,949:37 4:169865).
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What is the cash value of a three-year lease that require payments of $2097.64 payable at the beginning of each month for five years if interest is 10% compounded semi-annually?
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On an annual renewable lease, the quarterly lease payment on office space is $1600 payable in advance. What equivalent yearly payment made in advance would satisfy the lease if interest is 6.6% compounded monthly? *