Describes a capital lease in which annual lease payments

Assignment Help Accounting Basics

Reference no: EM131025332

Each of the three independent situations below describes a capital 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

	1	2	3
Lease term (years)	12	20	4
Lessor’s rate of return (known by lessee)	11%	9%	12%
Lessee’s incremental borrowing rate	12%	10%	11%
Fair value of leased asset	$620,000	$1,000,000	$205,000

Required:

a. Determine the amount of the annual lease payments as calculated by the lessor and above situations.

b. Determine the amount lessee would record as a leased asset and a lease liability for above situations.

Reference no: EM131025332

Questions Cloud

Compute the equilibrium price of a pizza : Vinnyland is a country where pizza, is produced, consumed and loved. The aggregate demand for pizza is described by Qd = 40 - Pd, while the aggregate supply by Qs = 2Ps-20. Compute the equilibrium price of a pizza and the number of pizzas that are..

Calculate pressure in pascals exerted by shelf footings : A set of bookshelves rests on a hard floor surface on four legs, each having a cross-sectional dimension of 3.0 X 4.1 cm in contact with the floor. The total mass of the shelves plus the books stacked on them is 262 kg. Calculate the pressure in ..

Personification and anthropomorphism : What's the difference between personification and anthropomorphism?

What is a good way to narrow the topic about rascisam : What is a good way to narrow the topic about rascisam

Describes a capital lease in which annual lease payments : Determine the amount lessee would record as a leased asset and a lease liability for above situations

What was the average annual unemployment rate : What was the average annual unemployment rate in 2006 for college educated people, 25 years and older?

Find one scholarly source and one popular source : 1.Start your post by stating a clarified research problem/research question on a topic of your choice for us to review and give you comments on.

What would the dimension of the null space of a^t : Also, if you let B be a 6 x 6 invertible matrix, what would dim(N(BA)^orthogonal complement) and dim(C(A^TB^T)^orthogonal complement) be? (C( ) is the column space)

Detailed analysis of any one of seven marketing mix element : Detailed analysis of any one of the seven marketing mix element pertaining to that service experience. Clear and detailed explanation of the service experience.

User Account

All Pages