Intermediate Acc 2 Quiz solution leases

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

This preview shows pages 1–2. Sign up to view the full content.

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

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 06/24/2008 for the course ACCT 202 taught by Professor Hintz during the Spring '08 term at St. John Fisher College.

### Page1 / 2

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

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online