A finance lease agreement calls for quarterly lease payments of $6,100 over a 12

Question

A finance lease agreement calls for quarterly lease payments of $6,100 over a 12-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 12%. Both the present value of the lease payments and the cost of the asset to the lessor are $158,000 714 Required: a. Prepare a partial amortization table up to the October 1 payment. b. What would be the amount of Interest expense (revenue) the lessee (lessor) would record in conjunction with the second quarterly payment on October 1? points eBook Complete this question by entering your answers in the tabs below Print Required ARequired B References Prepare a partial amortization table up to the October 1 payment. (Enter all amounts as positive values.) Lease Payment Effective Interest Decrease in Outstanding Date July 1 July 1 October 1 balance balance $ 158,000 6,100 6,100 S Required A Required B >

Explanation / Answer

Date Lease Payments Effective Interest Decrease in balance Outstanding balance July, 1 158000 July, 1 6100 0 6100 151900 October, 1 6100 4557 1543 150357 Interest expense (lessee) 4557 Interest Revenue (lessor) 4557

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