Question-1: Marks-05 GIVEN: Lease term 5 Years Fair value of assets Rs. 180,000 Annual rental payments...

Question-1: Marks-05
GIVEN:
Lease term 5 Years
Fair value of assets Rs. 180,000
Annual rental payments (beginnings) Rs. 35,927.39
Interest rate implicit in the lease 10%
Economic life 8 Years
Residual value Rs. 20,000
Required:
Identify type of lease if
a) Residual value is guaranteed b) Residual value is un guaranteed

Expert Solution

ekkarill92 answered 2 years ago

Question Lease Signed on January 1, 2015 Lease term 7 Years Fair value of equipment Rs....

Question Lease Signed on January 1, 2015 Lease term 7 Years Fair value of equipment Rs. 80,000 Cost of the leased asset Rs. 70,000 Life 7 Years Rental payments (Payable at the beginning) Rs. 14477.42 Implicit rate 12% Residual value 0 Required (1) Journal entries in the books of lessor for the first year. (2) Prepare lease amortization schedule. (Show complete computations)

On January 1, 2020 we a sign lease agreement. It calls for annual rental payments of...

On January 1, 2020 we a sign lease agreement. It calls for annual rental payments of $1,137 at the beginning of each year of the 3-year lease beginning on 1/1/20. The equipment has an economic useful life of 7 years; a fair value of $7,000; a book value of $5,000. The lessor expects a residual value of $4,500 at the end of the lease term. We have an incremental borrowing rate of 8%. There is no bargain purchase option. Ownership...

Consider the following terms of a lease. 1. The lease term is 5 years. The lease...

Consider the following terms of a lease. 1. The lease term is 5 years. The lease is noncancelable and requires equal payments of $50,000 at the beginning of each year, beginning January 1, 2019. 2. The leased asset is a standard piece of equipment. 3. The cost, and fair value, of the equipment to Lessor at the inception of the lease is $350,000. The equipment has an estimated economic life of 10 years and has a zero estimated residual value...

On 1/1/20 you lease equipment. The term of this capital lease is 3 years. The payments...

On 1/1/20 you lease equipment. The term of this capital lease is 3 years. The payments of $35,000 are to be made at the beginning of each year starting on 1/1/20. There is no residual value. The fair market value of this equipment on 1/1/20 is $110,000. The present value of the minimum lease payments is $97,414. The estimated economic life of the equipment is 6 years. You use the straight-line method to record depreciation. The lessor set the payments...

Wondershade Company leased equipment from Saturnetworks on January 1, 2014. Lease Term 3 years Annual Payments...

Wondershade Company leased equipment from Saturnetworks on January 1, 2014. Lease Term 3 years Annual Payments $40,000 on January 1 each year Life of asset 3 years Implicit Interest Rate 8% Incremental Rate 8% PV, annuity due, 3 periods, 8% 2.7833 PV, ordinary annuity 3 periods, 8% 2.5771 There is no expected residual value. Prepare a completed amortization table. Prepare appropriate journal entries for Wondershade Company for 2014 and 2015. Assume straight-line depreciation and a December 31 year-end. There should...

What is the present value of annual $7,399 payments over the upcoming 5 years ,on an...

What is the present value of annual $7,399 payments over the upcoming 5 years ,on an interest rate of 10%?

Given the following data on a bond: Term: 5 years YTM: 8.5% Annual coupon: 80 Face...

Given the following data on a bond: Term: 5 years YTM: 8.5% Annual coupon: 80 Face value: $1,000.00 Is it selling at a premium or a discount to par?

You are given a coupon-bond whose remaining term is 5 years with face value of 100$...

You are given a coupon-bond whose remaining term is 5 years with face value of 100$ and coupon rate of 5%, paid annually, with a first payment starting a year from now. Assume also that the annual yield is 6%. a) Calculate the interest accrued as well as the dirty and clean bond prices at times 0.5 and 1.6. Assume continuous compounding is used to model the dirty price between coupon payments. (b) Compute the dirty prices Bk?, Bk immediately...

QUESTION 1 A $150,000 loan is to be amortized over 7 years, with annual end-of-year payments....

QUESTION 1 A $150,000 loan is to be amortized over 7 years, with annual end-of-year payments. Which of these statements is CORRECT? a. The proportion of interest versus principal repayment would be the same for each of the 7 payments. b. The proportion of each payment that represents interest versus repayment of principal would be higher if the interest rate were higher. c. The proportion of each payment that represents interest as opposed to repayment of principal would be higher...

Find the price of a corporate bond maturing in 5 years that has a 5 percent coupon (annual payments), a $1,000 face value, and an AA rating.

3. Find the price of a corporate bond maturing in 5 yearsthat has a 5 percent coupon (annual payments), a $1,000face value, and an AA rating. A local newspaper’s financialsection reports that the yields on 5‐year bonds are AAA,6 percent; AA, 7 percent; and A, 8 percent. 4. What is the yield‐to‐maturity of a corporate bond witha 3‐year maturity, 5 percent coupon (semiannual payments),and $1,000 face value if the bond sold for $978.30?

Question