Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the begin

Question

2 years ago

15

Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the begin

ning of each year. The lessee is aware of the lessor's implicit rate of return.
Situation
1 2 3
Lease term (years) 12 20 4
Lessor's rate of return (known by lessee) 11% 9% 12%
Lessee's incremental borrowing rate 12% 10% 11%
Fair value of lease asset $620,000 $1,000,000 $205,000

Required:
a. Determine the amount of the annual lease payments as calculated by the lessor and above situations.
b. Determine the amount lessee would record as a leased asset and a lease liability for above situations.

Business

1 answer:

Aleks04 [339] · Answer 1 · 2022-06-15T08:18:33+03:00

Answe

Explanation: