The Following Are Some of the Characteristics of an Asset

question 52

Essay

The following are some of the characteristics of an asset available for lease:
$$\begin{array} { | l | l | } \hline \text { Fair value of leased asset } & 50,000 \\\hline \text { Lease term } & 3 \text { years } \\\hline \text { Payment frequency } & \text { Annual } \\\hline \text { Payment timing } & \text { Beginning of year } \\\hline \text { Guaranteed residual value } & 15,000 \\\hline \text { Interest rate implicit in lease (not known to lessee) } & 9 \% \\\hline \text { Lessee's incremental borrowing rate } & 3 \% \\\hline\end{array}$$ Requirements:
a.Determine the amount of lease payment that the lessor would require to lease the asset.
b.Compute the present value of minimum lease payments for the lessee.
c.Compute the present value of minimum lease payments for the lessor.
d.Evaluate whether the lessee should classify the lease as operating or finance.

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Definitions:

Date of Birth

The specific day on which a person was born, including the day, month, and year.

Tone and Inflection

Elements of speech that express emotional context, indicate questions, or convey emphasis by varying pitch and loudness.

Transfer a Patient's Call

The act of redirecting a phone call from a patient to another line or extension to ensure they receive the appropriate care or information from the correct healthcare department or professional.

Extension

The act of straightening or stretching out a body part, or the process of increasing the length or duration of something.