Solution:
Present value of minimum lease payment = $19,211 * Cumulative PV factor at 5% for 3 periods of annuity due
= $19,211 * 2.85941 = $54,932
Marin Company (Lessee) Lease Amortization Table |
||||
Date | Annual lease payment | Interest on liability | Reduction of lease liability | Lease liability |
1-Jan-20 | $54,932 | |||
1-Jan-20 | $19,211 | $0 | $19,211 | $35,721 |
1-Jan-21 | $19,211 | $1,786 | $17,425 | $18,296 |
1-Jan-22 | $19,211 | $915 | $18,296 | $0 |
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