Copy of ACCT 305 Live Lecture Excel Week 7

Copy of ACCT 305 Live Lecture Excel Week 7 - MINIMUM LEASE...

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Unformatted text preview: MINIMUM LEASE PAYMENTS FACTS Lease Term 3 years (6 semi-annual payments) Payment Interest Rate 12% SOLUTION Excel: Note: payments at beginning of each period = annuity due PMT $60,000 i 0.06 n 6 PV $312,742 * =PV(C11,C12,-C10,,1) Tables: $60,000 5.21236 From Present value of annuity due Table $312,742 $60,000 at beginning of each period * MINIMUM LEASE PAYMENTS FACTS Lease Term 3 years (6 semi-annual payments) Payment Interest Rate 12% SOLUTION Original Amount 312,742 Less: first payment (60,000) Outstanding balance 252,742 Interest Rate / 2 6% Interest Expense 15,165 $60,000 at beginning of each period * SALES TYPE LEASE FACTS Lease term 2 years (8 quarterly periods) Quarterly rental payments $15,000 - beginning each period Economic life of asset 2 years Fair value of asset $112,080 Implicit interest rate 8% Manufactured cost of equipment $85,000 REQUIREDShow how $15,000 payment is determined...
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Copy of ACCT 305 Live Lecture Excel Week 7 - MINIMUM LEASE...

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