Caterpillar is a financing company, invested $ 100000 to buy assets on 1/01/2008, and leased for a period of five (5) year. The implicit rate of interest is 10%. The assets fair value and market value is same, and the assets having no residual value at the end of the period. The type of payment will be considered at the beginning of the period. (Present value of an annuity due of 1 for five years at 10 % = 4.16986)
You are required to; –
- Calculate lease payment need to be collected by lessor
- Prepare AMORTIZATION Schedule for entire period
- Pass necessary journal entries for lessor
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