On June 1, 2021, Florida National leased a building. The lease agreement calls for Florida National to make lease payments of $3,618.18 each month for the next two years

Required:

1. Calculate the present value of the lease payments. Round to the nearest whole dollar. Use a financial calculator or Excel.

2. Record the lease on June 1, 2021.

Solutions

Expert Solution

Part 1.

Rate of interest	0.67%	8%/12
No of periods	24	12*2
Monthly payments	$3,618,18
Future value	0
Present value	$ 80,000	PV(B1, B2, -B3, B4, 0)

Part 2.

Date	Journal Entry	Debit	Credit
01-Jun-21	Lease Asset	$80,000
	To Lease Payable		$ 80,000

Rate of interest	0.67%	8%/12
No of periods	24	12*2
Monthly payments	$3,618,18
Future value	0
Present value	$ 80,000	PV(B1, B2, -B3, B4, 0)

Junaid answered 2 years ago

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