Chapter 15 HW-Part II

64993 75000 4550 amount to be recovered through

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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...
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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.

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