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Maru [420]
3 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]3 years ago
7 0

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Answe                                                                                                                            

Explanation:

                                                 

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