M351_Notes-Day_8_Leases_1

M351_Notes-Day_8_Leases_1 - M351 Notes, Class 8: Leases,...

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

View Full Document Right Arrow Icon
M351 Notes, Class 8: Leases, pages 1107-1124 A. Residual Value —expected fair value of the leased property at the end of the lease. Residual value may be zero or it may be some other amount. The book does not illustrate but residual value could be negative. B. Residual value may be Guaranteed or Unguaranteed by the lessee C. Lessors assume that they will realize the residual value at the end of the lease whether the residual value is guaranteed or unguaranteed. D. The residual value reduces the amount calculated for the lessor’s periodic lease payments ($23,237.09)—see Illustration 21-17 on page 1108 (the payments were calculated to be $23,981.62 [in Illustration 21-10 on page 1102] when the residual value was assumed to be zero). E. LESSEE : Note in Illustration 21-19 on page 1109 that the lease liability (and the amount of the leased asset) are recorded at the present value of the lease payments plus the present value of the guaranteed residual value ($100,000). F.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

M351_Notes-Day_8_Leases_1 - M351 Notes, Class 8: Leases,...

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

View Full Document Right Arrow Icon
Ask a homework question - tutors are online