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.
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Situation
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1
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2
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3
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4
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Lease term (years)
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4
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7
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6
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9
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Lessor's rate of return
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10%
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10%
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11%
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11%
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Fair value of leased asset
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$60,000
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$400,000
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$80,000
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$495,000
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Lessor's cost of leased asset
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$60,000
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$400,000
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$45,000
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$495,000
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Residual value:
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|
|
|
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Guaranteed by lessee
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0
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$ 60,000
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0
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$ 30,000
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Unguaranteed
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0
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0
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$ 7,000
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$ 15,000
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Required - Determine the annual lease payments for each situation.