Direct Financing lease : Accounting for Lessor

[@pineappleognam421]

I came across a book where they record Lease Receivables at Gross (not discounted) and recording a Discount on Lease account for the time value of money effect. Does this make any conflict or how can you explain your difference on reporting. Thanks! by the way,your the best at this. It's my book that is confusing.

[@MrPramodku]

How did you get this 9.5% to amortize the direct financing lease ?

[@maxhall2731]

A lot of your lectures are helpful but your lease lecture goes against Becker and making this topic more confusing. Becker shows that you do not book sales revenue or cost of goods sold when recording a direct financing lease. Can you please respond as to why you do it this way, I am trying to use this as a supplement to Becker and I am confused

[@Dakid015]

I think he did it that way for the sales-type lease example. For direct financing he used the deferred GP account.

[@kenjiPhoenix61]

Professor, for the Direct Finance Amortization Table, how did you get 9.5% for the effective interest rate? Around the 9:53 time mark.

[@AccountingLectures]

Hi Kendal, sorry I don't see 9.5%.

[@kenjiPhoenix61]

@@AccountingLectures Sorry, the correct time mark is 22:42.

[@alegremohammadallem6993]

@@kenjiPhoenix61 you interpolate the present value amounts to find the rate

[@kenjiPhoenix61]

@@alegremohammadallem6993 I don’t understand what that means

[@alegremohammadallem6993]

@@kenjiPhoenix61 he said it on the video, prof. said that you will "find the rate" using the present value of 28,000 that will amortize the cost for three periods. finding the appropriate rate by using the elements such as (present value and the periodic payments)to try and compute for the rate applicable is interpolation.

[@AhsanKhan-hx2sw]

Could you pls let us know how was 9.5% derived?