Company will convert the operating lease to capital lease, Ask an Expert

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Company will convert the operating lease to capital lease. Please see information below to determine the present value of projected operating lease payment and lease amortization.

Instructions:

a] Estimate the length of the remaining period beyond 3 year of operating lease

b]Beginning year of lease balance of 2004 is $4,500 with 4.5% as a discount rate to determining the present value.

c] The lease payments for 2004 - 2006 is $400 in each year, thereafter is $4,000. The estimated payments after 2006 are assumed equal to the 2006 payment and continue for the estimated length of the remaining period.

d] Please set up the table as follow. please Exhibit 3.7 on page 152 as reference.

e] Please show your calculation.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9966487

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