Question
In: Finance
The Harris Company is the lessee on a four-year lease with the following payments at the...
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year:
| Year 1: | $ | 11,000 |
| Year 2: | $ | 16,000 |
| Year 3: | $ | 21,000 |
| Year 4: | $ | 26,000 |
An appropriate discount rate is 7 percentage, yielding a present
value of $61,233.
a-1. If the lease is an operating lease, what will
be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will
be the initial value of the lease liability?
a-3. If the lease is an operating lease, what will
be the lease expense shown on the income statement at the end of
year 1?
a-4. If the lease is an operating lease, what will
be the interest expense shown on the income statement at the end of
year 1? (Leave no cells blank – be certain to enter “0”
wherever required.)
a-5. If the lease is an operating lease, what will
be the amortization expense shown on the income statement at the
end of year 1? (Leave no cells blank – be certain to enter
“0” wherever required.)
b-1. If the lease is a finance lease, what will be
the initial value of the right-of-use asset?
b-2. If the lease is a finance lease, what will be
the initial value of the lease liability?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
The Harris Company is the lessee on a four-year lease with the following payments at the...
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year: Year 1: $ 17,000 Year
2: $ 22,000 Year 3: $ 27,000 Year 4: $ 32,000 An appropriate
discount rate is 7 percentage, yielding a present value of $81,556.
1. If the lease is an operating lease, what will be the initial
value of the right-of-use asset? 2. If the lease is an operating
lease, what will be the initial...
The Harris Company is the lessee on a four-year lease with the following payments at the...
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year:
Year 1:
$
11,500
Year 2:
$
16,500
Year 3:
$
21,500
Year 4:
$
26,500
An appropriate discount rate is 7 percentage, yielding a present
value of $62,927.
a-1. If the lease is an operating lease, what will
be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will
be the initial...
The Harris Company is the lessee on a four-year lease with the following payments at the...
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year:
Year 1:
$
12,500
Year 2:
$
17,500
Year 3:
$
22,500
Year 4:
$
27,500
An appropriate discount rate is 7 percentage, yielding a present
value of $66,314.
a-1. If the lease is an operating lease, what will
be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will
be the initial...
The Harris Company is the lessee on a four-year lease with the following payments at the...
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year:
Year 1:
$
11,000
Year 2:
$
16,000
Year 3:
$
21,000
Year 4:
$
26,000
An appropriate discount rate is 7 percentage, yielding a present
value of $61,233.
a-1. If the lease is an operating lease, what will
be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will
be the initial...
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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.
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The
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was due at the inception of the lease. The present value of the
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and the Lessee is reasonably certain to exercise that option. The
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at lease commencement and the remainder annually at the lease
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and the Lessee is reasonably certain to exercise that option. The
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Lease term
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at lease commencement and the remainder annually at the lease
anniversary date thereafter
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On January 1, Year 1, a lessee signed a five-year equipment lease with annual payments of...
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as interest expense for the year ended December 31, Year 1?
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