Determine the annual lease payments for each situation

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Question - Each of the four independent situations below describes a capital lease in which annual lease payments are payable at the beginning of each year.


Situation


1

2

3

4

Lease term (years)

4

7

6

9

Lessor's rate of return

10%

10%

11%

11%

Fair value of leased asset

$60,000

$400,000

$80,000

$495,000

Lessor's cost of leased asset

$60,000

$400,000

$45,000

$495,000

Residual value:





Guaranteed by lessee

0

$ 60,000

0

$ 30,000

Unguaranteed

0

0

$ 7,000

$ 15,000

Required - Determine the annual lease payments for each situation.

Reference no: EM131823042

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