Thank you! On June 30, 2018, Fly-By-Night Airlines leased a jumbo jet from Boein

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On June 30, 2018, Fly-By-Night Airlines leased a jumbo jet from Boeing Corporation. The terms of the lease require Fly-By-Night to make 20 annual payments of $1,700,000 on each June 30. Generally accepted accounting principles require this lease to be recorded as a liability for the present value of scheduled paym ents. Assume that a 7% interest rate properly refects the time value ofmoney in this situation. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. At what amount should Fly-By-Night record the lease liability on June 30, 2018, assuming that the first payment will be made on June 30, 2019? 2. At what amount should Fly-By-Night record the lease liability on June 30, 2018, before any payments are made, assuming that the first payment will be made on June 30, 2018? Complete this question by entering your answers in the tabs below Required 1Required 2 At what amount should Fly-By-Night record the lease liability on June 30, 2018, assuming that the first payment will be made on June 30, 2019? Table or calculator function Payment: PV - 6/30/2018:

Explanation / Answer

Table or calculator function: PVA of $1 Payment: $1700000 n = 20 I = 7% PV ­ 6/30/2018: 18009817 2 Table or calculator function: PVAD of $1 Payment: $1700000 n = 20 I = 7% PV ­ 6/30/2018: 19270520

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