Business, 30.07.2021 05:00 hit89

A $2,300 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. What is the total interest paid over the term of the lease

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Answer from: yoda78

Complete Question:

Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $2,600 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years.

Lease Cash Effective Decrease in Outstanding

Payment Payment Interest Balance Balance

41,236

1 8,800 ?? ?? 32,436

2 8,800 1,946 6,854 25,582

3 8,800 1,535 7,265 18,317

4 8,800 1,099 7,701 10,616

5 8,800 ?? ?? ??

6 2,600 147 2,453 0

Total interest paid over the term of the lease is:

= $5,364

Explanation:

a) Data and Calculations:

Lease Cash Effective Decrease in Outstanding

Payment Payment Interest Balance Balance

a) b) c) d) e)

41,236

1 8,800 0 8,800 32,436

2 8,800 1,946 6,854 25,582

3 8,800 1,535 7,265 18,317

4 8,800 1,099 7,701 10,616

5 8,800 637 8,163 2,453

6 2,600 147 2,453 0

c) Effective interest rate = 6%( $1,946/$32,436 * 100)

d) Decrease in balance = (b) - (c)

e) Outstanding balance = Outstanding Balance minus (d)

Total interest paid over the term of the lease = $5,364

Answer from: Quest

shopping mall is a group of retail stores under one roof. the cognitive structure of an urban shopping center. attributes of shopping mall image, customer satisfaction and mall patronage for selected shopping malls in southern gauteng

Answer from: Quest

1. c

2. b

3. a

4. c

5. a

6. b

7. c

8. c

9.b

10. d

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