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Renault entered into 2 lease contracts. The first one was a 6-year lease for equipment with...

Renault entered into 2 lease contracts. The first one was a 6-year lease for equipment with a €2,000 monthly lease payment at the beginning of each month. Renault took passion of the equipment on 1/1/2017. The market rate was 9.5%. The second lease contract was a 5 year lease, beginning on 1/1/2017 for retail shops with a semi-annual payments of €36,000 due at the end of the period. Assume the market rate of interest on such transactions is 6.5%. Assume the first lease is a capital lease and the second lease is an operating lease.

  1. Determine the present value of the first contract.

N =                  I/Y =                           PV =                            PMT =                         FV =

  1. Determine the present value of the. Second lease.

N =                  I/Y =                           PV =                            PMT =                         FV =   

  1. Prepare the appropriate journal entry for the first lease on 1/1/2017.
  2. Prepare the appropriate journal entry for the second lease on 7/1/2017

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ekkarill92 answered 3 months ago
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