In computing the annual lease payments, the lessor deducts only a guaranteed residual value from the...
In computing the annual lease payments, the lessor deducts only a guaranteed residual value from the fair value of a leased asset.
Select one: True False
Homework Answers
| FALSE |
| In computing the annual lease payments, the lessor deducts both a guaranteed and unguaranteed residual value from the fair value of a leased asset. |
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In computing the annual lease payments, the lessor deducts only
a guaranteed residual value from the...
1. (LESSOR ENTRIES FOR FINANCING LEASE WITH A GUARANTEED RESIDUAL) The following facts pertain to a...
1. (LESSOR ENTRIES FOR FINANCING LEASE WITH A GUARANTEED RESIDUAL) The following facts pertain to a non-cancelable lease agreement between Ace Leasing Company and King Company, a lessee. January 1, 2020 $137,171 $54,000 $500,000 Commencement of Lease Date Annual lease payment due at the beginning of the year beginning with January 1, 2020 Residual value of equipment at end of lease term, guaranteed by lessee Book Value of Lease Equipment on LESSOR books Lease term Economic life of leased equipment...
1. (LESSOR ENTRIES FOR FINANCING LEASE WITH A GUARANTEED RESIDUAL) The following facts pertain to a...
1. (LESSOR ENTRIES FOR FINANCING LEASE WITH A GUARANTEED RESIDUAL) The following facts pertain to a non-cancelable lease agreement between Ace Leasing Company and King Company, a lessee. Commencement of Lease Date January 1, 2020 Annual lease payment due at the beginning of the year beginning with January 1, 2020 $137,171 Residual value of equipment at end of lease term, guaranteed by lessee $54,000 Book Value of Lease Equipment on LESSOR books $500,000 Lease term 6 years Economic life of...
(Lessee-Lessor Entries, Finance Lease with a Guaranteed Residual Value) (LO 2, 4) Glaus Leasing Company agrees...
(Lessee-Lessor Entries, Finance Lease with a Guaranteed Residual Value) (LO 2, 4) Glaus Leasing Company agrees to lease equipment to Jensen Corporation on January 1, 2017. The following information relates to the lease agreement. 1.The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2.The cost of the machinery is $525,000, and the fair value of the asset on January 1, 2017, is $700,000. 3.At the end...
When a lessee is accounting for a capital (finance) lease a) a guaranteed residual value is...
When a lessee is accounting for a capital (finance) lease a) a guaranteed residual value is excluded from the “minimum lease payments.” b) an unguaranteed residual value is excluded from the “minimum lease payments.” c) a guaranteed residual value is basically an additional lease payment due at the end of the lease. d) the present value of any guaranteed residual is deducted from the leased asset cost in determining the depreciable amount. In calculating depreciation of a leased asset, the...
E21.13 (LO 2,4) (Lessee-Lessor Entries, Sales-Type Lease; Guaranteed Residual Value) Phelps Company leases a building to...
E21.13 (LO 2,4) (Lessee-Lessor Entries, Sales-Type Lease; Guaranteed Residual Value) Phelps Company leases a building to Walsh, Inc. on January 1, 2020. The following facts pertain to the lease agreement. 1. The lease term is 5 years, with equal annual rental payments of $4,703 at the beginning of each year. 2. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. The building...
One of the criteria for a lease to be classified as a sales-type lease by the...
One of the criteria for a lease to be classified as a sales-type lease by the lessor is that the present value of the sum of (1) the lease payments and (2) any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the leased asset. Substantially all of the fair value of the leased asset generally is considered to be O 90% 25% 60% 75%
Exercise 15-24 (Static) Calculation of annual lease payments; residual value [LO15-2, 15-6] Each of the four...
Exercise 15-24 (Static) Calculation of annual lease payments;
residual value [LO15-2, 15-6]
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.)
Check 10 1 4 10% $50,000 $50,000...
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The follow...
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The following in- formation is available to both entities regarding the lease terms and the leased asset. I. Lessor's cost of the leased asset was $30,000. The asset was new at the inception of the lease term. 2. Lease term is three years starting January 1,2020 3. Estimated useful life of the leased asset is six years. Estimated residual value at end of six years is zero. 4....
Each of the four independent situations below describes a finance lease in which annual lease payments are payable at t...
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.) Situation Lease term (years) Lessor's rate of return 10 11% 93 128 Fair value of lease asset $53,000 353,000...
1. (LESSOR ENTRIES FOR FINANCING LEASE WITH A GUARANTEED RESIDUAL) The following facts pertain to a non-cancelable lease agreement between Ace Leasing Company and King Company, a lessee. January 1, 2020 $137,171 $54,000 $500,000 Commencement of Lease Date Annual lease payment due at the beginning of the year beginning with January 1, 2020 Residual value of equipment at end of lease term, guaranteed by lessee Book Value of Lease Equipment on LESSOR books Lease term Economic life of leased equipment...
1. (LESSOR ENTRIES FOR FINANCING LEASE WITH A GUARANTEED RESIDUAL) The following facts pertain to a non-cancelable lease agreement between Ace Leasing Company and King Company, a lessee. Commencement of Lease Date January 1, 2020 Annual lease payment due at the beginning of the year beginning with January 1, 2020 $137,171 Residual value of equipment at end of lease term, guaranteed by lessee $54,000 Book Value of Lease Equipment on LESSOR books $500,000 Lease term 6 years Economic life of...
E21.13 (LO 2,4) (Lessee-Lessor Entries, Sales-Type Lease; Guaranteed Residual Value) Phelps Company leases a building to Walsh, Inc. on January 1, 2020. The following facts pertain to the lease agreement. 1. The lease term is 5 years, with equal annual rental payments of $4,703 at the beginning of each year. 2. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. The building...
One of the criteria for a lease to be classified as a sales-type lease by the lessor is that the present value of the sum of (1) the lease payments and (2) any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the leased asset. Substantially all of the fair value of the leased asset generally is considered to be O 90% 25% 60% 75%
Exercise 15-24 (Static) Calculation of annual lease payments;
residual value [LO15-2, 15-6]
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.)
Check 10 1 4 10% $50,000 $50,000...
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The following in- formation is available to both entities regarding the lease terms and the leased asset. I. Lessor's cost of the leased asset was $30,000. The asset was new at the inception of the lease term. 2. Lease term is three years starting January 1,2020 3. Estimated useful life of the leased asset is six years. Estimated residual value at end of six years is zero. 4....
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.) Situation Lease term (years) Lessor's rate of return 10 11% 93 128 Fair value of lease asset $53,000 353,000...
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