Intermediate Acc 2 Quiz solution leases

Intermediate Acc 2 Quiz solution leases - Solution 1) 1)...

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Solution 1) 1) Transfer ownership? no 2) Bargain purchase option? no 3) Lease term > .75xuseful life? yes 4>.75x5 4) PV( min lease payments)>.9xFMV equipment? yes Pvad(R=$5,040, n=4, I=5%)= 5,040x3.546x1.05= $18,765 >.9x20000 This shows that the leases is a capital lease for the lessee. This with the fact that Lessor Co. is confident that the payments are collectible, and anticipates having no unreimbursible costs means the lease is a capital lease for the lessor. 2) Lessor amortization schedule Date CV(beg) interest payment amortization Cv. (end) 1/1/x0 20,000 - 5,040 (5,040) 14,960 1/1/x1 14,960 748 5,040 (4,292) 10,668 1/1/x2 10,668 533 5,040 (4,507) 6,161 1/1/x3 6,161 308 5,040 (4,732) 1,429 12/31/x3 1,429 71 1,500 (1,429) 0 1,660 Lessee amortization schedule Date CV(beg) interest payment amortization Cv. (end) 1/1/x0 18,765 5,040 (5,040) 13,725 1/1/x1 13,725 686 5,040 (4,354) 9,371 1/1/x2 9,371 469 5,040 (4,571) 4,800 1/1/x3 4,800 240 5,040 (4,800) (0) 3) Lessor 1/1/x0 Lease Payments Receivable
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Intermediate Acc 2 Quiz solution leases - Solution 1) 1)...

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