Lease Illustration #2
Illustration #2 Illustrates capital, Sales-type, no BPO, no RV
Information: Three year lease, signed 1/1/x1.
- Estimated useful life of the asset is three years. The asset cost is $80,000.
- The present value of the minimum lease payments (MLP) equals the market value of the asset, $120,000.
- There is no transfer of ownership at the end of the lease; the estimated residual value (RV) is zero.
- There are no significant uncertainties surrounding this lease regarding collectibility or future performance.