Dizon, Marianne-Kae L.

BSA31KB2

Problem 14-6
TABLE OF AMORTIZATION
COST OF EQUIPMENT 5,000,000.00 DATE PAYMENT
INITIAL DIRECT COST 250,000.00 1/1/2017
NET INVESTMENT 5,250,000.00 1/1/2017 900,000.00
1/1/2018 900,000.00
GROSS RENTALS 7,200,000.00 1/1/2019 900,000.00
RESIDUAL VALUE 600,000.00 1/1/2020 900,000.00
GROSS INVESTMENT 7,800,000.00 1/1/2021 900,000.00
COST OF EQUIPMENT 5,000,000.00 1/1/2022 900,000.00
UNEARNED INTEREST INCOME 2,800,000.00 1/1/2023 900,000.00
1/2/2024 900,000.00

JOURNAL ENTRIES GROSS INVESTMENT

2017 NET INVESTMENT
EQUIPMENT(initial direct cost) 250,000.00 INT INC OVER THE LEASE TERM
CASH 250,000.00

LEASE RECEIVABLE 7,800,000.00

EQUIPMENT 5,000,000.00 ANSWERS:
UNEARNED INTEREST INCOME 2,800,000.00 1.) GROSS INVESTMENT- B. 7,800,00
2.) NET INVEST MENT- B. 5,250,000
CASH 900,000.00 3.) INTEREST INCOME OVER THE LE
LEASE RECEIVABLE 900,000.00 4.) INTEREST INCOME-2017- B. 522,

UNEARNED INTEREST INCOME 522,000.00

INTEREST INCOME 522,000.00

2018
CASH 900,000.00
LEASE RECEIVABLE 900,000.00

UNEARNED INTEREST INCOME 476,640.00

INTEREST INCOME 476,640.00

2024
MACHINERY 600,000.00
LEASE RECEIVABLE 600,000.00

Problem 14-7
TABLE OF AMORTIZATION
COST OF EQUIPMENT 4,361,200.00 DATE PAYMENT
PV OF RESIDUAL VALUE 93,200.00 1/1/2017
NET INVESTMENT TO BE RECOVERED 4,268,000.00 12/31/2017 800,000.00
12/31/2018 800,000.00
COST OF EQUIPMENT 4,361,200.00 12/31/2019 800,000.00
PV OF RESIDUAL VALUE 93,200.00 12/31/2020 800,000.00
NET INVESTMENT TO BE RECOVERED 4,268,000.00 12/31/2021 800,000.00
DIVIDE BY PV OF ORDINARY ANNUITY 5.335 12/31/2022 800,000.00
ANNUAL RENTAL OVER LEASE TERM 800,000.00 12/31/2023 800,000.00
12/31/2024 800,000.00
GROSS RENTALS 6,400,000.00
RESIDUAL VALUE 200,000.00 ANSWERS:
GROSS INVESTMENT 6,600,000.00 1.) NET INVEST MENT TO BE COVERED FROM REN
COST OF EQUIPMENT 4,361,200.00 2.) ANNUAL RENTAL OVER LEASE TERM- A. 800,00
UNEARNED INTEREST INCOME 2,238,800.00 3.) INTEREST INCOME IN 2017- A. 436,120.00

JOURNAL ENTRIES
2017
LEASE RECEIVABLE 6,600,000.00
EQUIPMENT 4,361,200.00
UNEARNED INTEREST INCOME 2,238,800.00

CASH 800,000.00
LEASE RECEIVABLE 900,000.00

UNEARNED INTEREST INCOME 436,120.00

INTEREST INCOME 436,120.00

2018
CASH 800,000.00
LEASE RECEIVABLE 800,000.00

UNEARNED INTEREST INCOME 319,785.60

INTEREST INCOME 319,785.60

2024
MACHINERY 200,000.00
LEASE RECEIVABLE 200,000.00

Problem 14-8
TABLE OF AMORTIZATION
PV OF LEASE PAYMENTS 5,801,120 DATE PAYMENT
PV OF RESIDUAL VALUE 198,880 1/1/2017
NET INVESTMENT TO BE RECOVERED 6,000,000 12/31/2017 1,730,541.00
12/31/2018 1,730,541.00
GROSS RENTALS 8,652,705.00 12/31/2019 1,730,541.00
RESIDUAL VALUE 400,000.00 12/31/2020 1,730,541.00
GROSS INVESTMENT 9,052,705.00 12/31/2021 1,730,541.00
COST OF MACHINE 6,000,000.00
UNEARNED INTEREST INCOME 3,052,705.00

JOURNAL ENTRIES
2017 ANSWERS:
LEASE RECEIVABLE 9,052,705.00 1.)NET LEASE RECEIVABLE- C. 6,000
MACHINE 6,000,000.00 2.) GROSS INVESTMENT- B. 9,052,70
UNEARNED INTEREST INCOME 3,052,705.00 3.) TOTAL UNEARNED INTEREST INC
4.) INTEREST INCOME-2017- C. 900,
CASH 1,730,541.00
LEASE RECEIVABLE 1,730,541.00

UNEARNED INTEREST INCOME 900,000.00

INTEREST INCOME 900,000.00

2018
CASH 1,730,541.00
LEASE RECEIVABLE 1,730,541.00

UNEARNED INTEREST INCOME 413,556.72

INTEREST INCOME 413,556.72

2021
MACHINERY 400,000.00
LEASE RECEIVABLE 400,000.00
 Problem 14-9

INTEREST PRINCIPAL PRESENT VALUE PV OF LEASE PAYMENTS

5,250,000.00 PV OF RESIDUAL VALUE
- 900,000.00 4,350,000.00 NET INVESTMENT TO BE RECOVERED
522,000.00 378,000.00 3,972,000.00
476,640.00 423,360.00 3,548,640.00 GROSS RENTALS
425,836.80 474,163.20 3,074,476.80 RESIDUAL VALUE
368,937.22 531,062.78 2,543,414.02 GROSS INVESTMENT
305,209.68 594,790.32 1,948,623.70 NET INVESTMENT
233,834.84 666,165.16 1,282,458.54 UNEARNED INTEREST INCOME
153,895.03 746,104.97 536,353.57

SS INVESTMENT 7,800,000.00 JOURNAL ENTRIES

INVESTMENT 5,250,000.00 2017
NC OVER THE LEASE TERM 2,550,000.00 LEASE RECEIVABLE
ASSET
UNEARNED INTEREST INCOME

CASH
ROSS INVESTMENT- B. 7,800,000.00 LEASE RECEIVABLE
ET INVEST MENT- B. 5,250,000.00
NTEREST INCOME OVER THE LEASE TERM- A. 2,550,000.00 UNEARNED INTEREST INCOME
NTEREST INCOME-2017- B. 522,000 INTEREST INCOME

2018
CASH
LEASE RECEIVABLE

UNEARNED INTEREST INCOME

INTEREST INCOME

2021
MACHINERY
LEASE RECEIVABLE

Problem 14-10

INTEREST PRINCIPAL PRESENT VALUE COST OF EQUIPMENT

 4,361,200.00 DIVIDE BY PV OF ORDINARY ANNUITY
436,120.00 363,880.00 3,997,320.00 ANNUAL RENTAL OVER LEASE TERM
319,785.60 480,214.40 3,517,105.60
422,052.67 377,947.33 3,139,158.27 GROSS RENTALS(GROSS INVESTMENT)
376,698.99 423,301.01 2,715,857.26 COST OF EQUIPMENT
325,902.87 474,097.13 2,241,760.14 UNEARNED INTEREST INCOME
269,011.22 530,988.78 1,710,771.35
205,292.56 594,707.44 1,116,063.92 JOURNAL ENTRIES
133,927.67 666,072.33 449,991.58 2017
LEASE RECEIVABLE
EQUIPMENT
NT TO BE COVERED FROM RENTAL- C. 4,268,000.00 UNEARNED INTEREST INCOME
L OVER LEASE TERM- A. 800,000.00
ME IN 2017- A. 436,120.00 CASH
LEASE RECEIVABLE

UNEARNED INTEREST INCOME

INTEREST INCOME

2018
CASH
LEASE RECEIVABLE

UNEARNED INTEREST INCOME

INTEREST INCOME

INTEREST PRINCIPAL PRESENT VALUE

6,000,000.00
900,000.00 830,541.00 5,169,459.00
413,556.72 1,316,984.28 3,852,474.72
 462,296.97 1,268,244.03 2,584,230.69
310,107.68 1,420,433.32 1,163,797.37
139,655.68 1,590,885.32 (427,087.95)

ET LEASE RECEIVABLE- C. 6,000,000.00

ROSS INVESTMENT- B. 9,052,705.00
OTAL UNEARNED INTEREST INCOME- A. 3,052,705.00
NTEREST INCOME-2017- C. 900,000.00
 TABLE OF AMORTIZATION
3,790,000 DATE PAYMENT INTEREST PRINCIPAL PRESENT VALUE
744,000 1/1/2017 4,534,000.00
4,534,000 12/31/2017 1,000,000.00 453,400.00 546,600.00 3,987,400.00
12/31/2018 1,000,000.00 318,992.00 681,008.00 3,306,392.00
5,000,000.00 12/31/2019 1,000,000.00 396,767.04 603,232.96 2,703,159.04
1,200,000.00 12/31/2020 1,000,000.00 324,379.08 675,620.92 2,027,538.12
6,200,000.00 12/31/2021 1,000,000.00 243,304.57 756,695.43 1,270,842.70
4,534,000.00
1,666,000.00

ANSWERS:
6,200,000.00 1.)NET LEASE RECEIVABLE- A. 4,534,000.00
4,534,000.00 2.) GROSS INVESTMENT- B. 6,200,000.00
1,666,000.00 3.) TOTAL UNEARNED INTEREST INCOME- B. 1,600,000.00
4.) INTEREST INCOME-2017- C. 453,400.00
1,000,000.00
1,000,000.00

453,400.00
453,400.00

1,000,000.00
1,000,000.00

318,992.00
318,992.00

1,200,000.00
1,200,000.00

TABLE OF AMORTIZATION
3,234,000.00 DATE PAYMENT INTEREST PRINCIPAL PRESENT VALUE
 4.312 1/1/2017 3,234,000.00
750,000.00 12/31/2017 750,000.00 258,720.00 491,280.00 2,742,720.00
12/31/2018 750,000.00 219,417.60 530,582.40 2,212,137.60
3,750,000.00 12/31/2019 750,000.00 265,456.51 484,543.49 1,727,594.11
3,234,000.00 12/31/2020 750,000.00 207,311.29 542,688.71 1,184,905.41
516,000.00 12/31/2021 750,000.00 142,188.65 607,811.35 577,094.05

3,750,000.00
3,234,000.00
516,000.00 ANSWER:
4.) INTEREST REVENUE OVER THE LEASE TERM- C. 516,000.00
750,000.00
750,000.00

258,720.00
258,720.00

750,000.00
750,000.00

219,417.60
219,417.60
ENT VALUE

ENT VALUE