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In: Accounting
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
ekkarill92 answered 2 years agoRelated Solutions
On 1 January 2015, Finley entered into an agreement to lease a boat. The term of...
On 1 January 2015, Finley entered into an agreement to
lease a boat. 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%. Finley is responsible for insuring and maintaining
the boat throughout
the term of the lease. the expected salvage value of the boat is
2000.
Instructions:
(a)Tell whether this is operating or finance lease and give two
reasons. Also determine present...
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Question
Lease Signed on January 1, 2015
Lease term 7 Years
Fair value of equipment Rs. 80,000
Cost of the leased asset Rs. 70,000
Life 7 Years
Rental payments (Payable at the beginning) Rs. 14477.42
Implicit rate 12%
Residual value 0
Required
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Annual lease payments are $10,000
First payment is on January 1, 2020 and the other payments are
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Annual lease payments are $10,000
First payment is on January 1, 2020 and the other payments are
on 31 December each year
At the end of the lease the leased asset will revert to the
lessor
The asset’s economic life is estimated at 10 years
Winthrop could have obtained equivalent financing from its bank
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Winthrop’s fiscal year end...
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to lease equipment:
5-year lease term
Annual lease payments are $10,000
First payment is on January 1, 2020 and the other payments are
on 31 December each year
At the end of the lease the leased asset will revert to the
lessor
The asset’s economic life is estimated at 10 years
Winthrop could have obtained equivalent financing from its bank
at a rate of 5%
Winthrop’s fiscal year end...
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5-year lease term
Annual lease payments are $10,000
First payment is on January 1, 2020 and the other payments are
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lessor
The asset’s economic life is estimated at 10 years
Winthrop could have obtained equivalent financing from its bank
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Winthrop’s fiscal year end...
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