Khaleesi Corporation leases dragonelass weapons to customers. She gains a loyal following of
customers because dragonglass is of limited supply but high demand due to its usefulness for the
upcoming winter. Further, Khaleesi tends to offer more favorable financing terms than
competitors offering substitutive products (e.g., Lannister, LLC) Khaleesi was recently
approached by the Lords of the North, Inc. (the North\") which is interested in leasing a
substantial stock of weapons over a potentially lengthy geriod.of time. The North has indicated a
willingness to pay any rate that Khaleesi Corporation demands for its dragcaglass products, but
generally receives an interest rate of 12% on all other borrowing transactions. The North\'s
management are a very noble group, so payments are reasonably assured. Further, there are no
material cost ncertainties. Khaleesi has gathered its council to discuss entering into such a
contract with the North and has invited you to provide financial council. Khaleesi\'s board has
proposed several alternative sets of lease terms (below) and would like you determine what the
North\'s annual payments will be under each scenario, if payments are made at the beginning of
the period $489,450 Fair value of weapons to be leased Lease Ternm Useful Life of leased assets
Lessee/Lessor interest rate Residual Value (guaranteed) 1. On the first tab of your Excel
workbook, prepare a schedule for Khaleesi which uses Excel to $489,450 11 years 13 years 696
So $489,450 11 years 13 years 6% $24,350 years 13 years 896 $24,350 compute the North\'s
necessary annual payment under each of the scenarios listed in the chart above. The schedule
should list for each scenario above the desired present value of lease payments, future value of
the leased asset, the lease term, and the interest rate and utilize an Excel formola to compute a
payment (Hint: -PMT). Khaleesi is a high paying client of your firm, so the schedule should be
extremely organized and professional looking (s.e, include a title, date, description in the top left-
hand corner and utilize borders, font effects, etc. in cells to make the worksheet look visually
appealing). On the second tab of the Excel workbook, prepare a lease amortization schedule
describing the pattern of payments and interest over the lease term for both Khaleesi and the
North. On the third tab of the Excel workbook, prepare the appropriate entries for both Khaleesi
and the North on 1/1/18. Numbers in journal entries should be linked to the table prepared in
number 3 above or computed using Excel formulas. On the fourth tab of the Excel workbook,
prepare the appropriate entries for both Khaleesi and the North through 1/1/21. Numbers in
journal entries should be linked to the table prepared in number 3 above or computed using Excel
formulas 2. 3. 4. 5. On the fifth tab, prepare the appropriate entries for both Khaleesi and the
North on 12/31/2028. Assume the weapons returned to Khaleesi have an actual resi.
Khaleesi Corporation leases dragonelass weapons to customers. She gai.pdf
1. Khaleesi Corporation leases dragonelass weapons to customers. She gains a loyal following of
customers because dragonglass is of limited supply but high demand due to its usefulness for the
upcoming winter. Further, Khaleesi tends to offer more favorable financing terms than
competitors offering substitutive products (e.g., Lannister, LLC) Khaleesi was recently
approached by the Lords of the North, Inc. (the North") which is interested in leasing a
substantial stock of weapons over a potentially lengthy geriod.of time. The North has indicated a
willingness to pay any rate that Khaleesi Corporation demands for its dragcaglass products, but
generally receives an interest rate of 12% on all other borrowing transactions. The North's
management are a very noble group, so payments are reasonably assured. Further, there are no
material cost ncertainties. Khaleesi has gathered its council to discuss entering into such a
contract with the North and has invited you to provide financial council. Khaleesi's board has
proposed several alternative sets of lease terms (below) and would like you determine what the
North's annual payments will be under each scenario, if payments are made at the beginning of
the period $489,450 Fair value of weapons to be leased Lease Ternm Useful Life of leased assets
Lessee/Lessor interest rate Residual Value (guaranteed) 1. On the first tab of your Excel
workbook, prepare a schedule for Khaleesi which uses Excel to $489,450 11 years 13 years 696
So $489,450 11 years 13 years 6% $24,350 years 13 years 896 $24,350 compute the North's
necessary annual payment under each of the scenarios listed in the chart above. The schedule
should list for each scenario above the desired present value of lease payments, future value of
the leased asset, the lease term, and the interest rate and utilize an Excel formola to compute a
payment (Hint: -PMT). Khaleesi is a high paying client of your firm, so the schedule should be
extremely organized and professional looking (s.e, include a title, date, description in the top left-
hand corner and utilize borders, font effects, etc. in cells to make the worksheet look visually
appealing). On the second tab of the Excel workbook, prepare a lease amortization schedule
describing the pattern of payments and interest over the lease term for both Khaleesi and the
North. On the third tab of the Excel workbook, prepare the appropriate entries for both Khaleesi
and the North on 1/1/18. Numbers in journal entries should be linked to the table prepared in
number 3 above or computed using Excel formulas. On the fourth tab of the Excel workbook,
prepare the appropriate entries for both Khaleesi and the North through 1/1/21. Numbers in
journal entries should be linked to the table prepared in number 3 above or computed using Excel
formulas 2. 3. 4. 5. On the fifth tab, prepare the appropriate entries for both Khaleesi and the
North on 12/31/2028. Assume the weapons returned to Khaleesi have an actual residual value of
$500 (remember, Khaleesi guaranteed a residual value of $24,350).
Solution
2. UPLOAD OF EXCEL SHEET NOT POSSIBLE SO i AM PASTING THE SOLUTION
NECESSARY ANNUAL PAYMENT
OPTION
A
B
C
FAIR VALUE
4,89,450.00
4,89,450.00
4,89,450.00
RESIDUAL VALUE
-
24,350.00
24,350.00
INTEREST RATE
6
6
8
LEASE TERM
11
11
11
USEFUL LIFE
13
13
13
ANNUITY FACTOR R%, 11 YEARS
7.8869
7.8869
7.1390
ANNUAL LEASE PAYMENT
62,058.60
58,971.21
65,149.18
LEASE AMORTIZATION SCHEDULE
OPTION
