Question
In: Accounting
Calculation of lease payments Zest Company, as lessee, enters into a lease agreement on January 1,...
Calculation of lease payments
Zest Company, as lessee, enters into a lease agreement on January
1, 2018, to
lease equipment. The following data are relevant to the lease
agreement.
- The term of the noncancellable lease is three years, with no
renewal option.
- The fair value of the equipment on January 1, 2018 is $60,000.
The
estimated residual value is $0.
- The equipment reverts back to the lessor at the termination of
the lease.
- The lessor used an implicit rate of 4%.
Instructions:
-Calculate the required amount of the lease payments
(Present Value & Future Value Tables are provided on pages 3
and 4)
Solutions
Expert Solution
Note
Lease payment should be that, that it's discounted cash flows at lessors implicit rate covers it's fair value - salvage if any
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ekkarill92 answered 1 year agoRelated Solutions
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