accounting1960
New member
- Joined
- Apr 21, 2013
- Messages
- 4
Hi-
I need help, I cannot figure out how the present value of 0.79719 came about, according to copy of my time value tables I have 0.797, not sure how added 19 came about. Thanks for your help.
See below-
Exercise 21-4
(a) Computation of annual payments
Cost (fair value) of leased asset to lessor $246,100.00
Less: Present value of salvage value
(residual value in this case)
$16,940.00 x 0.79719 (Present value of 1 at 12% for 2 periods) 13,504.40
Amount to be recovered through lease payments $232,595.60
Two periodic lease payments $232,595.60 ÷ 1.69005 $137,626.46
KRAUSS LEASING COMPANY (Lessor)
Lease Amortization Schedule
Date
Annual Payment
Less Executory Costs
Interest on Lease
Receivable
Recovery of Lease
Receivable
Lease
Receivable
1/1/13 $246,100.00
12/31/13 $137,626.46 $29,532.00 $108,094.46 138,005.54
12/31/14 137,626.46 16,560.92 121,065.54 16,940.00
$46,092.92
12/31/13 Cash = ($137,626.46 + $7,090.00) = $144,716.46
I need help, I cannot figure out how the present value of 0.79719 came about, according to copy of my time value tables I have 0.797, not sure how added 19 came about. Thanks for your help.
See below-
Exercise 21-4
(a) Computation of annual payments
Cost (fair value) of leased asset to lessor $246,100.00
Less: Present value of salvage value
(residual value in this case)
$16,940.00 x 0.79719 (Present value of 1 at 12% for 2 periods) 13,504.40
Amount to be recovered through lease payments $232,595.60
Two periodic lease payments $232,595.60 ÷ 1.69005 $137,626.46
KRAUSS LEASING COMPANY (Lessor)
Lease Amortization Schedule
Date
Annual Payment
Less Executory Costs
Interest on Lease
Receivable
Recovery of Lease
Receivable
Lease
Receivable
1/1/13 $246,100.00
12/31/13 $137,626.46 $29,532.00 $108,094.46 138,005.54
12/31/14 137,626.46 16,560.92 121,065.54 16,940.00
$46,092.92
12/31/13 Cash = ($137,626.46 + $7,090.00) = $144,716.46