Tamarisk Inc. wishes to lease machinery to Thiensville Company.
Thiensville wants the machinery for 4 years, although it has a
useful life of 10 years. The machinery has a fair value at the
commencement of the lease of $39,000, and Tamarisk expects the
machinery to have a residual value at the end of the lease term of
$30,000. However, Thiensville does not guarantee any part of the
residual value. Thiensville does expect that the residual value
will be $37,000 instead of $30,000.
What would be the amount of the annual rental payments Tamarisk
demands of Thiensville, assuming each payment will be made at the
end of each year and Tamarisk wishes to earn a rate of return on
the lease of 6%? (For calculation purposes, use 5
decimal places as displayed in the factor table provided and round
final answer to 0 decimal places, e.g. 5,275.)
Amount of equal annual lease payments: ??????
Tamarisk Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years,...
Skysong Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10years. The machinery has a fair value at the commencement of the lease of $42,000, and Skysong epects the machinery to have a residual value at the end of the lease term of $29,000. However, Thiensville does not guarantee any part of the residual value. Thiensvile does expect that the residual value will be $40,000 instead of...
Larkspur Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $46,000, and Larkspur expects the machinery to have a residual value at the end of the lease term of $28,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $44,000 instead...
Kingbird Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $49,000, and Kingbird expects the machinery to have a residual value at the end of the lease term of $25,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $47,000 instead...
Marin Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $49,000, and Marin expects the machinery to have a residual value at the end of the lease term of $25,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $47,000 instead...
Brief Exercise 21A-8 Cardinal Company is negotiating to lease a piece of equipment to MTBA, Inc. MTBA requests that the lease be for 9 years. The equipment has a useful life of 10 years. Cardinal wants a guarantee that the residual value of the equipment at the end of the lease is at least $5,000. MTBA agrees to guarantee a residual value of this amount though it expects the residual value of the equipment to be only $2,500 at the...
Brief Exercise 21A-8
Kingbird Company is negotiating to lease a piece of equipment to
MTBA, Inc. MTBA requests that the lease be for 9 years. The
equipment has a useful life of 10 years. Kingbird wants a guarantee
that the residual value of the equipment at the end of the lease is
at least $4,000. MTBA agrees to guarantee a residual value of this
amount though it expects the residual value of the equipment to be
only $2,000 at the...
Metlock Company is negotiating to lease a piece of equipment to MTBA, Inc. MTBA requests that the lease be for 9 years. The equipment has a useful life of 10 years. Metlock wants a guarantee that the residual value of the equipment at the end of the lease is at least $4,000. MTBA agrees to guarantee a residual value of this amount though it expects the residual value of the equipment to be only $2,000 at the end of the...
Sage Hill Company is negotiating to lease a piece of equipment to MTBA, Inc. MTBA requests that the lease be for 9 years. The equipment has a useful life of 10 years. Sage Hill wants a guarantee that the residual value of the equipment at the end of the lease is at least $4,000. MTBA agrees to guarantee a residual value of this amount though it expects the residual value of the equipment to be only $2,500 at the end...
On December 31, 2019, Wildhorse Company leased machinery from Terminator Corporation for an agreed upon lease term of 3 years. Wildhorse agreed to make annual lease payments of $14,500, beginning on December 31, 2019. The expected residual value of the machinery at the end of the lease term is $7,250. Wildhorse guarantees a residual value of $7,250 at the end of the lease term, which equals the expected residual value of the machinery. What amount will Wildhorse record as its...
On December 31, 2019, Wildhorse Company leased machinery from Terminator Corporation for an agreed upon lease term of 3 years. Wildhorse agreed to make annual lease payments of $14,500, beginning on December 31, 2019. The expected residual value of the machinery at the end of the lease term is $7,250. Wildhorse guarantees a residual value of $7,250 at the end of the lease term, which equals the expected residual value of the machinery. What amount will Wildhorse record as its...