Chapter 15 HW-Part II

# 64993 75000 4550 amount to be recovered through

This preview shows page 1. Sign up to view the full content.

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

Unformatted text preview: epaymentsatthebeginning ofeachofthenext5years:(\$70,4504.23972**) \$16,617 *presentvalueof\$1:n=5,i=9% **presentvalueofanannuitydueof\$1:n=5,i=9% Situation 4 Amount to be recovered (fair value) Less: Present value of the residual value (\$45,000 x .40388*) \$465,000 (18,175) Amount to be recovered through periodic lease payments \$446,825 ______________________ Leasepaymentsatthebeginning ofeachofthenext8years:(\$446,8255.56376**) \$80,310 *presentvalueof\$1:n=8,i=12% **presentvalueofanannuitydueof\$1:n=8,i=12% Exercise 15-13 Situation 1 2 3 4 A. The lessor's: 1. Minimum lease payments1 \$700,000 \$750,000 2. Gross investment in the lease2 700,000 750,000 3. Net investment in the lease3 548,592 547,137 B. The lessee's: 4. Minimum lease payments4 700,000 750,000 5. Leased asset5 548,592 547,137 6. Lease liability6 548,592 547,137 1 \$800,000 850,000 610,168 800,000 586,842 586,842 \$840,000 900,000 596,764 840,000 572,531 572,531 (\$100,000 x number of payments) + residual value guaranteed by lessee and/or by third party; for situation 4: (\$100,000 x 8) + (\$40,000). Minimum lease payments plus unguaranteed residual value; for situation 4: (\$840,000 + \$60,000). Present value of gross investment (discounted at lessor's rate); for situation 4: (\$100,000 x 5.56376) + (\$100,000 x .40388). (\$100,000 x number of payments) + residual value guaranteed by lessee; for situation 4: (\$100,000 x 8) + \$40,000. Present value of minimum lease payments (discounted at lower of lessor's rate and lessee's incremental borrowing rate); should not exceed fair value; for situation 4: (\$100,000 x 5.56376) + (\$40,000 x .40388). Present value of minimum lease payments (discounted at lower of lessor's rate and lessee's incremental borrowing rate); should not exceed fair value; for situation 4: (\$100,000 x 5.56376) + (\$40,000 x .40388). 2 3 4 5 6 Exercise 15-14 Situation 1 Amount to be recovered (fair value) Less: Present value of the BPO price (\$10,000 x .56743*) \$60,000 (5,674) Amount to be recovered through periodic lease payments \$54,326 _____________________ Leasepaymentsatthebeginning ofeachofthenext5years:(\$54,3264.03735**) \$13,456 *presentvalueof\$1:n=5,i=12% **presentvalueofanannuitydueof\$1:n=5,i=12% Situation 2 Amount to be recovered (fair value) Less: Present va...
View Full Document

## This note was uploaded on 05/08/2010 for the course ACCTG 322 taught by Professor Gill during the Spring '08 term at San Diego State.

Ask a homework question - tutors are online