Can someone help me with this please Mike Macinski Leasing Company leases a new
ID: 2493999 • Letter: C
Question
Can someone help me with this please
Mike Macinski Leasing Company leases a new machine that has a cost and fair value of $91,300 to Sharrer Corporation on a 3-year noncancelable contract. Sharrer Corporation agrees to assume all risks of normal ownership including such costs as insurance, taxes, and maintenance. The machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2014. Mike Macinski Leasing Company expects to earn a 9% return on its investment. The annual rentals are payable on each December 31.
Prepare an amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years involved.
(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)
Explanation / Answer
Formula for loan amortization = A= [i*P*(1+i)^n]/[(1+i)^n-1] Amt $ A = periodical installment ? P=Loan amount = 91,300 i= interest rate per period = 9.000% = n=total no of payments 3 A=[0.09*91300*(1.09)^3]/[(1.09)^3-1] = 33345.44 So Installment Amount = $ 36,071 Amortization schedule Principal 91,300 Period Rent Receipt Interest Expense Principal Repaid Balance of Principal/Liability or receivable Jan 1. 2014. 91,300 Dec 31.02014 $ 36,071.00 8,217.00 $ 27,854.00 63,446.00 Dec 31.02015 $ 36,071.00 5710.14 $ 30,360.86 33,085.14 Dec 31.02016 $ 36,071.00 2977.6626 $ 33,093.34 (8.20) R/O error
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