Each of the four independent situations below describes a sales-type lease in which annual lease payments aat 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,$1) (Use appropriate factor(s) from the tables provided.)Situation123Lease term (years)778Lessor's and lessee's interest rateResidual value:81289811%10%Estimated fair value0$50,000$8,000$50,000Guaranteed by lessee00$8,000$60,000Determine the following amounts at the beginning of the lease. (Round your intermediate and final answersdollar amount.)Situation2AThe lessor's:1. Lease payments2. Gross investment in the lease3. Net investment in the leaseThe lessee's:4. Lease payments5. Right-of-use asset6. Lease payableB

Lease is the amount of rent for the property in the business use.

Each of the four independent situations below describes a sales-type lease in which annual lease paymen 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) (Use appropriate factor(s) from the tables provided.) Situation 2 7 7 8 Lease term (years) Lessor's and Residual value: lessee's interest rate 8 12% 98 118 10% $50,000 Estimated fair value. Guaranteed by lessee $8,000 $50,000 $8,000 $60,000 0 Determine the following amounts at the beginning of the lease. (Round your intermediate and final answe dollar amount.) Situation A The lessor's: 1. Lease payments 2. Gross investment in the lease 3. Net investment in the lease The lessee's: 4 Lease payments B 2

Each of the four independent situations below describes a sales-type lease in which annual lease paymen 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) (Use appropriate factor(s) from the tables provided.) Situation 2 7 7 8 Lease term (years) Lessor's and Residual value: lessee's interest rate 8 12% 98 118 10% $50,000 Estimated fair value. Guaranteed by lessee $8,000 $50,000 $8,000 $60,000 0 Determine the following amounts at the beginning of the lease. (Round your intermediate and final answe dollar amount.) Situation A The lessor's: 1. Lease payments 2. Gross investment in the lease 3. Net investment in the lease The lessee's: 4 Lease payments B 2

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 5RE: Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the...

See similar textbooks

Similar questions

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 Situation 1 Situation 2 Situation 3 Situation 4 Lease Payments Residual Value Guarantee $ 1 5,000 0 0 2 6 10% $58,000 $358,000 $83,000 $58,000 $358,000 $53,000 $ PV of Lease Payments Situation 9 11% $ 58,000 0 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.) 58,000 3 7 9% 4 PV of…
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $18,000 are payable at the beginning of each year. Each is a finance lease for the lessee. EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $) (Use oppropriate foctor(s) from the tables provided.) Situation -2 4 Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: 15 10% 10% 10% 10% Guaranteed by lessee Unguaranteed Purchase option: After (years) Exercise price Reasonably certain? $7,200 $3,600 $3,600 $7, 200 4. $8, 600 $ 2,600 none n/a n/a $4,600 no no yes Determine the following amounts at the beginning of the lease: (Round your final answers to nearest whole dollar.) Situation A The lessor's 1 Total lease payments 2 Gross investment in the lease 3 Net investment in the lease B The lessee's 4 Total lease payments 5. Right-of-use asset 6 Lease liability
Each of the four independent situations below describes a sales-type lease in which annual lease payments of 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 $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Lease term (years) Lessor's and lessee's interest rate Residual value: A Estimated fair value Guaranteed by lessee. B 7 98 The lessor's: 1. Lease payments 2. Gross investment in the lease 3. Net investment in the lease The lessee's: 4. Lease payments 5. Right-of-use asset 6. Lease payable 0 0 2 Situation 2 7 118 $50,000 0 Determine the following amounts at the beginning of the lease. (Round your intermediate and final answers to the nearest whole dollar amount.) Situation 3 8 10% $8,000 $8,000 8 128 $50,000 $60,000
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. (EV of $1. PV of $1. EVA of S1, PVA of $1. EVAD of $1 and PVAD of $1) 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 Situation 1 Situation 2 Situation 3 Situation 4 1 Lease Payments 6 10% $ 58,000 $ 58,000 e 0 2 Situation 9 11% $ 358,000 $ 358,000 $ 58,000 Residual Value PV of Lease Guarantee Payments 0 7 9% $ 83,000 $ 53,000 $ 15,000 $ 15,000 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. PV of…
Each of the three 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, EVA of $1, PVA of $1, EVAD of $1 and PVAD of $1) (Use approprlate factor(s) from the tables provided.) Situation 1 2 Lease term (years) Lessor's rate of return (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset 10 20 11% 9% 12% 12% 10% 11% $720,000 $1,100,000 $305,000 Requlred: 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 llability, for each of the above situatlons. (Round your answers to the nearest whole dollar.) Right of-use Asset/Lease Payable Lease Payments Situation 1 Situation 2 Situation 3
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $14.000 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability $ 42,000✔✔ 42,000 41,084 42,000✔ 41,084 X 41,084 X 2 45.070 X 47.600 45.070 X 1 $2,000✔ 41,084 X 41.084 X 3 3 12% $0 $0 Answer is complete but not entirely correct. Situation 3 none Purchase option: After (years) Exercise price Reasonably certain? 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) Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest…
Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end 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.) Situation 1 2 3 Lease term (years) 12 20 3 Lessor's rate of return (known by lessee) 10% 8% 11% Lessee's incremental borrowing rate 11% 9% 10% Fair value of lease asset $650,000 $1,005,000 $210,000 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.)
Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end 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 (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset Situation 1 Situation 2 Situation 3 $ $ $ X Answer is not complete. Lease Payments 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.) 4,769,583 X 8,816,264 X 729,076 x 1 12 10% 11% $700,000 Right-of-use Asset/Lease Payable Situation 2 15 8% 9% $1,030,000 3 4 11% 10% $235,000
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $13,500 are payable at the beginning of each year. Each is a finance lease for the lessee. Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed Purchase option: A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability $ 1 67,500 2 Situation 1 67,500 5 5 11% $ 0 none 3 2 After (years) Exercise price Reasonably certain? 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) Determine the following amounts at the beginning of the lease: Note: Round your final answers to nearest whole dollar. 67,500 Situation 5 6 11% $ 5,400 $ 0 4 4 $ 7,700 no 3 5 6 11% $ 2,700 $ 2,700 5 $ 1,700 no 4 5 8 11% $0 $ 5,400 3 $…
Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end 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 (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset Situation 1 Situation 2 Situation 3 Answer is not complete. Right-of-use Asset/Lease Payable Lease Payments $ 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.) 144,513 1 9 85,177 12% 10% $770,000 Situation 2 20 10% 11% $1,065,000 4 10% 9% $270,000
Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end 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 (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset 1 10 Situation 1 Situation 2 Situation 3 Situation 2 20 10% 11% $730,000 $1,045,000 8% 9% 3 5 12% 11% $250,000 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.) Lease Payments Right-of-use Asset/Lease Payable
Each of the three 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 (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset 1 10 10% 11% $750,000 Situation 1 Situation 2 Situation 3 Situation 2 20 8% 9% $1,130,000 3 5 11% 10% $335,000 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.) Lease Payments Right-of-use Asset/Lease Payable