BOOK OF LESSEE (CHRIS TUCKER)

Fair Value of Asset 600,000

Less: PV of BPO (40,000 x 0.62092132305) 24,836.85
PV of periodic payment 575,163.15
PV Factor of annuity 4.16986544645
Annual Payment 137,933.26

1/1/2022
Right-of-use equipment 600,000
Cash 137.933.26
Lease Liability 462,066.74

12/31/2022
Depreciation Expense 165,714.29
Accumulated Depreciation - ROU 165,714.29

Interest Expense 46,206.67

Lease Liability 46,206.67

1/1/2023
Lease Liability 137,933.26
Cash 137,933.26

12/31/2023
Depreciation Expense 138,095.24
Accumulated Depreciation - ROU 138,095.24

Interest Expense 37,034.02

Lease Liability 37,034.02

BOOK OF LESSOR (JACKIE CHAN LEASING)

Gross Investment of the Lease:

Lease Payment on commencement date 137,933.26
Lease Payment not yet collected 551,733.04
BPO 40,000
729,666.30
Less: Net Investment of the Lease:
Lease Payment on commencement date 137,933.26
PV of lease not yet collected 437,229.87
PV of BPO 24,836.85
600,000.00
Discount on Finance Lease Receivable 129,666.30

1/1/2022
Cash 137,933.26
Finance Lease Receivable 591,730.04
Cost of Goods Sold 600,000
Sales 462,066.72
Discount on finance lease receivable 129,666.30
Finished Goods Inventory 600,000

12/31/2022
Discount on Finance Lease Receivable 46,206.67
Interest Revenue 46,206.67

1/1/2023
Cash 137,933.26
Finance Lease Receivable 137,933.26

12/31/2023
Discount on Finance Lease Receivable 37,034.02
Interest Revenue 37,034.02
BOOK OF LESSEE

REDUCTION IN
PRINCIPAL
DATE ANNUAL PAYMENT APPLIED INTEREST OBLIGATION LEASE LIABILITY
1/1/2022 462,066.74
1/1/2023 137,933.26 46,206.67 91,726.59 370,340.15
1/1/2024 137,933.26 37,034.02 100,900.24 269,439.91
1/1/2025 137,933.26 26,943.99 110,989.27 158,450.64
1/1/2026 137,933.26 15,845.06 122,088.20 36,362.44
12/31/2026 40,000 3,636.24 36,363.76 1.32

BOOK OF LESSOR
REDUCTION TO
DATE ANNUAL PAYMENT APPLIED INTEREST INVESTMENT NET INVESTMENT
1/1/2022 462,066.72
1/1/2023 137,933.26 46,206.67 91,726.59 370,340.13
1/1/2024 137,933.26 37,034.02 100,900.24 269,439.18
1/1/2025 137,933.26 26,943.99 110,989.27 158,449.91
1/1/2026 137,933.26 15,845.00 122,088.26 36,362.00
12/31/2026 40,000 3,636.20 36,363.80 1.8
SUM OF THE YEAR DEPRECIATION

BOOK VALUE TOTAL COST DEPRECIATION

YEAR YEAR START DEPRECIABLE PERCENT
2022 600,000 580,000 28.57%
2023 434,285.71 580,000 23.81%
2024 296,190.47 580,000 19.05%
2025 185,714.28 580,000 14.29%
2026 102,857.14 580,000 9.52%
2027 47,619.04 580,000 4.76%

SOLUTION:

600,000 - 20,000 = 580,000

SUM OF THE YEAR:

6+5+4+3+2+1 = 21
YEAR
1 6./21
2 5./21
3 4./21
4 3.21
5 2./21
6 1./21

2022 2025
580,000 X 6/21 = 165,714.29 580,000 X 3/21 = 82,857.14
(600,000 - (185,714.28-
165,714.29) = 434,285.71 82,857.14) = 102,857.14
414,286.72 + 82, 857.14 =
2023 497,142.86
580,000 X 5/21 = 138,095.24
(434,285.71 - 138,095.24) = 2026
296,190.47 580,000 X 2/21 = 55,238.09
165,714.29 + 138,095.24 = (102.857.14 - 55,239.09) =
303,809.53 47,619.04
497,142.86 + 55,238.09 =
2024 552,380.96
580,000 X 4/21 = 110,476.19
(296,190.47 - 110,476.19) = 2027
185,714.28 580,000 X 1/21 = 27,619.05
303,809.53 + 110,476.19 = (47,619.05 - 27,619.05) =
414,286.72 20,000
552,380.96 + 27,619.05 =
580,000
DEPRECIATION ACCUMULATED BOOK VALE YEAR
EXPENSE DEPRECIATION END
165,714.29 165,714.29 434,285.71
138,095.24 303,809.53 296,190.47
110,476.19 414,285.72 185,714.28
82,857.14 497,142.86 102,857.14
55,238.09 552,380.96 47,619.04
27,619.05 580,000 20,000