At the beginning of its fiscal year, Lakeside Inc. leased office space to LTT Corporation under a twelfth-year operating lease agreement. The contract calls for quarterly rent payments of $36,000 each. The office building was acquired by Lakeside at a cost of $3.1 million and was expected to have a useful life of 25 years with no residual value. What will be the effect of the lease on LTTâs earnings for the first year (ignore taxes)? LTT reduces it's earnings by $
At the beginning of its fiscal year, Lakeside Inc. leased office space to LTT Corporation under a eleven-year operating lease agreement. The contract calls for quarterly rent payments of $41,000 each. The office building was acquired by Lakeside at a cost of $3.6 million and was expected to have a useful life of 30 years with no residual value.
What will be the effect of the lease on Lakesideâs earnings for the first year (ignore taxes)?
Lakeside Increases it's earnings by
A lease agreement calls for quarterly lease payments of $7,000 over a 10-year lease term, with the first payment at July 1, the leaseâs inception. The interest rate is 12%. Both the fair value and the cost of the asset to the lessor are $167,000.