Homework Answers
Lease rent payments are made in future and he we use present value table. Since it is at the Begining of the period we use annuity due. Thus we use Present Value of Annuity Due table. Hence Option B is Correct.
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Since the lease payments under a lease agreement are normally paid at the beginning of each...
Rumsfeld Corporation leased a machine on December 31, 2018, for a three-year period. The lease agreement calls for annua...
Rumsfeld Corporation leased a machine on December 31, 2018, for a three-year period. The lease agreement calls for annual payments in the amount of $17,000 on December 31 of each year beginning on December 31, 2018. Rumsfeld has the option to purchase the machine on December 31, 2021, for $21,000 when its fair value is expected to be $31,000. The machine's estimated useful life is expected to be six years with no residual value. The appropriate interest rate for this...
Rumsfeld Corporation leased a machine on December 31, 2020, for a three-year period. The lease agreement...
Rumsfeld Corporation leased a machine on December 31, 2020, for a three-year period. The lease agreement calls for annual payments in the amount of $18,000 on December 31 of each year beginning on December 31, 2020. Rumsfeld has the option to purchase the machine on December 31, 2023, for $20,000 when its fair value is expected to be $40,000. The machine's estimated useful life is expected to be five years with no residual value. The appropriate interest rate for this...
3. ABC Company, as lessee, enters into a lease agreement on January 1, 2018, for equipment....
3. ABC Company, as lessee, enters into a lease agreement on
January 1, 2018, for equipment. The following data are relevant to
the lease agreement:
1. The term of the noncancelable lease is 4 years, with no
renewal option. Payments of $978,446 are due on January 1of each
year.
2. The fair value of the equipment on January 1, 2018 is
$3,500,000. The equipment has an economic life of 6 years with no
salvage value.
3. ABC Company depreciates similar...
A finance lease agreement calls for quarterly lease payments of $4,625 over a 15-year lease term,...
A finance lease agreement calls for quarterly lease payments of $4,625 over a 15-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 8%. Both the present value of the lease payments and the cost of the asset to the lessor are $164,000. a.Prepare a partial amortization table up to the October 1 payment . b. What would be the amount of interest expense (revenue) the lessee (lessor) would record...
The lease agreement specified quarterly payments of $3,500 beginning September 30, 2021, the beginning of the...
The lease agreement specified quarterly payments of $3,500 beginning September 30, 2021, the beginning of the lease, and each quarter (December 31, March 31, and June 30) through June 30, 2024 (three-year lease term). The florist had the option to purchase the truck on September 29, 2023, for $7,000 when it was expected to have a residual value of $16,000. The estimated useful life of the truck is four years. Mid-South Auto Leasing's quarterly interest rate for determining payments was...
A finance lease agreement calls for quarterly lease payments of $5,753 over a 12-year lease term,...
A finance lease agreement calls for quarterly lease payments of $5,753 over a 12-year lease term, with the first payment on July 1 the beginning of the lease. The annual interest rate is 8%. Both the present value of the lease payments and the cost of the asset to the lessor are $180,000 Required: o. Prepare a partial amortization table up to the October 1 payment. b. What would be the amount of interest expense (revenue) the lessee (lesson) would...
A finance lease agreement calls for quarterly lease payments of $5,519 over a 10-year lease term,...
A finance lease agreement calls for quarterly lease payments of $5,519 over a 10-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 8%. Both the present value of the lease payments and the cost of the asset to the lessor are $154,000. Required: a. Prepare a partial amortization table up to the October 1 payment. b. What would be the amount of interest expense (revenue) the lessee (lessor) would...
A finance lease agreement calls for quarterly lease payments of $6,720 over a 10-year lease term,...
A finance lease agreement calls for quarterly lease payments of $6,720 over a 10-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 12%. Both the present value of the lease payments and the cost of the asset to the lessor are $160,000. Required: a. Prepare a partial amortization table up to the October 1 payment. b. What would be the amount of interest expense (revenue) the lessee (lessor) would...
The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics,...
The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Commencement date Lease term Economic life of leased equipment Residual value at the end of lease term Lessee's incremental borrowing rate Annual lease payment due at the beginning of each year, beginning with October 1, 2017 October 1, 2017 6 years 7 years $0 8.50% $65,000 The collectability of the lease payments is probable by the lessor. The...
A finance lease agreement calls for quarterly lease payments of $7,392 over a 10-year lease term,...
A finance lease agreement calls for quarterly lease payments of $7,392 over a 10-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 12%. Both the present value of the lease payments and the cost of the asset to the lessor are $176,000. Required: a. Prepare a partial amortization table up to the October 1 payment. b. What would be the amount of interest expense (revenue) the lessee (lessor) would...
3. ABC Company, as lessee, enters into a lease agreement on
January 1, 2018, for equipment. The following data are relevant to
the lease agreement:
1. The term of the noncancelable lease is 4 years, with no
renewal option. Payments of $978,446 are due on January 1of each
year.
2. The fair value of the equipment on January 1, 2018 is
$3,500,000. The equipment has an economic life of 6 years with no
salvage value.
3. ABC Company depreciates similar...
The lease agreement specified quarterly payments of $3,500 beginning September 30, 2021, the beginning of the lease, and each quarter (December 31, March 31, and June 30) through June 30, 2024 (three-year lease term). The florist had the option to purchase the truck on September 29, 2023, for $7,000 when it was expected to have a residual value of $16,000. The estimated useful life of the truck is four years. Mid-South Auto Leasing's quarterly interest rate for determining payments was...
A finance lease agreement calls for quarterly lease payments of $5,753 over a 12-year lease term, with the first payment on July 1 the beginning of the lease. The annual interest rate is 8%. Both the present value of the lease payments and the cost of the asset to the lessor are $180,000 Required: o. Prepare a partial amortization table up to the October 1 payment. b. What would be the amount of interest expense (revenue) the lessee (lesson) would...
A finance lease agreement calls for quarterly lease payments of $5,519 over a 10-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 8%. Both the present value of the lease payments and the cost of the asset to the lessor are $154,000. Required: a. Prepare a partial amortization table up to the October 1 payment. b. What would be the amount of interest expense (revenue) the lessee (lessor) would...
A finance lease agreement calls for quarterly lease payments of $6,720 over a 10-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 12%. Both the present value of the lease payments and the cost of the asset to the lessor are $160,000. Required: a. Prepare a partial amortization table up to the October 1 payment. b. What would be the amount of interest expense (revenue) the lessee (lessor) would...
The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Commencement date Lease term Economic life of leased equipment Residual value at the end of lease term Lessee's incremental borrowing rate Annual lease payment due at the beginning of each year, beginning with October 1, 2017 October 1, 2017 6 years 7 years $0 8.50% $65,000 The collectability of the lease payments is probable by the lessor. The...
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