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Question: On 1 January 2015, Finley entered into an agreement to lease a boat. The fair...

Question:
On 1 January 2015, Finley entered into an agreement to lease a boat. The fair value
of the boat was Rs. 36,000 and the term of the lease was four years. Annual lease
payments of Rs. 10,000 are payable in advance. The interest rate implicit in the
lease is 7.5%.
Intructions:
(a) determine whether this is operating or finance lease.
(b) prepare lease amortization schedule
(c) prepare journal entries on behalf of lessee for all years including depreciation entries and also the disposing entry
(d) also prepare depreciation schedule for all years
(e) prepare ledgers for lease liability and accumulated depreciation
( show proper computations)

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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