Question
In: Accounting
Unifood Pty. Limited entered a lease agreement with Charlatan Pty. Limited for the lease of a...
Unifood Pty. Limited entered a lease agreement with Charlatan
Pty. Limited for the lease of a building on the 1st of July 2018.
The lease was for five years and the terms required payments of
$40,000 per year. The estimated economic life of the building is 40
years. The market value of the building is $20 million. Lease
payments are made at the end of each financial year.
Required:
(1) Under the new accounting standards AASB 16, discuss whether the
lease agreement will be considered an operating lease or a finance
lease to the lessee. Explain your answers.
(2) Prepare journal entries for the lessor – Charlatan Pty. Limited at the end of each financial year.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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