Question
In: Accounting
Supply Ltd entered into a non-cancellable five-year lease arrangement with Customer Ltd on 1 July 2019....
Supply Ltd entered into a non-cancellable five-year lease arrangement with Customer Ltd on 1 July 2019. The lease is for an item of machinery. There are to be five annual payments of $315 000, the first being made on 30 June 2020. The implicit interest rate is 12%. The Machinery is expected to have an economic life of six years, after which time it will have an expected residual value of $210 000. There is a bargain purchase option that Customer Ltd will be able to exercise at the end of the fifth year for $280 000. Customer Ltd determined that this contract contains a lease.
REQUIRED:
Prepare the journal entries in the books of the lessee (Customer Ltd) from 1 July 2019 to 30 June 2020 (the end of the reporting period). Show all working.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Supply Ltd entered into a non-cancellable five-year lease arrangement with Customer Ltd on 1 July 2019....
Supply Ltd entered into a non-cancellable five-year lease
arrangement with Customer Ltd on 1 July 2019. The lease is for an
item of machinery. There are to be five annual payments of $315
000, the first being made on 30 June 2020. The implicit interest
rate is 12%. The Machinery is expected to have an economic life of
six years, after which time it will have an expected residual value
of $210 000. There is a bargain purchase option that...
Supply Ltd entered into a non-cancellable five-year lease arrangement with Customer Ltd on 1 July 2019....
Supply Ltd entered into a non-cancellable five-year lease
arrangement with Customer Ltd on 1 July 2019. The lease is for an
item of machinery. There are to be five annual payments of $315
000, the first being made on 30 June 2020. The implicit interest
rate is 12%. The Machinery is expected to have an economic life of
six years, after which time it will have an expected residual value
of $210 000. There is a bargain purchase option that...
Supply Ltd entered into a non-cancellable five-year lease arrangement with Customer Ltd on 1 July 2019....
Supply Ltd entered into a non-cancellable five-year lease
arrangement with Customer Ltd on 1 July 2019. The lease is for an
item of machinery. There are to be five annual payments of $315
000, the first being made on 30 June 2020. The implicit interest
rate is 12%. The Machinery is expected to have an economic life of
six years, after which time it will have an expected residual value
of $210 000. There is a bargain purchase option that...
(A) Supply Ltd entered into a non-cancellable five-year lease arrangement with Customer Ltd on 1 July...
(A)
Supply Ltd entered into a non-cancellable five-year lease
arrangement with Customer Ltd on 1 July 2019. The lease is for an
item of machinery. There are to be five annual payments of $315
000, the first being made on 30 June 2020. The implicit interest
rate is 12%. The Machinery is expected to have an economic life of
six years, after which time it will have an expected residual value
of $210 000. There is a bargain purchase option...
Part A (12 marks) Supply Ltd entered into a non-cancellable five-year lease arrangement with Customer Ltd...
Part A Supply Ltd entered into a non-cancellable
five-year lease arrangement with Customer Ltd on 1 July 2019. The
lease is for an item of machinery. There are to be five annual
payments of $315 000, the first being made on 30 June 2020. The
implicit interest rate is 12%. The Machinery is expected to have an
economic life of six years, after which time it will have an
expected residual value of $210 000. There is a bargain purchase...
JK Ltd enters into a non-cancellable five-year lease agreement with Burt Ltd on 1 July 2019....
JK Ltd enters into a non-cancellable five-year lease agreement
with Burt Ltd on 1 July
2019.
The lease is for an item of machinery that, at the inception of the
lease, has a fair value of
$647,192. The machinery is expected to have an economic life of six
years, after which time
it will have an expected residual value of $105,000. There is a
bargain purchase option that
JK Ltd will be able to exercise at the end of the...
Sandy Ltd enters into a non-cancellable five-year lease agreement with Bill Ltd on 1 July 2019....
Sandy Ltd enters into a non-cancellable five-year lease
agreement with Bill Ltd on 1 July 2019. The lease is for an item of
machinery that, at the inception of the lease, has a fair value of
$1 294 384. The cost of the machinery to Bill Ltd is $1200 000.
The machinery is expected to have an economic life of six years,
after which time it will have an expected residual value of $210
000. There is a bargain purchase...
Customer Corp. entered into a five-year lease agreement with Supplier Ltd, on 1 July 2019. The...
Customer Corp. entered into a five-year lease agreement with
Supplier Ltd, on 1 July 2019. The lease is for a number of spa
baths. Supplier Ltd acquired the spa baths on 1 July 2019, at the
fair value of $1,009,850. Customer Corp. uses the spa baths at a
club. The baths are expected to have an economic life of seven
years, after which time they will have no residual value. There is
a bargain purchase option that Customer Corps will...
Customer Corp. entered into a five-year lease agreement with Supplier Ltd, on 1 July 2019. The...
Customer Corp. entered into a five-year lease agreement with
Supplier Ltd, on 1 July 2019. The lease is for a number of spa
baths. Supplier Ltd acquired the spa baths on 1 July 2019, at the
fair value of $1,009,850. Customer Corp. uses the spa baths at a
club. The baths are expected to have an economic life of seven
years, after which time they will have no residual value. There is
a bargain purchase option that Customer Corps will...
Sullivan Ltd enters into a non-cancellable five-year lease agreement with Bubbles Ltd on 1 July 2015....
Sullivan Ltd enters into a non-cancellable five-year lease
agreement with Bubbles Ltd on 1 July 2015. The lease is for a
number of spa baths that, at the inception of the lease, have a
fair value of $924 560. The spas are being used as part of the
amenities at Sullivan's exclusive Question The baths are
expected to have an economic life of seven years, after which time
they will have no residual value. There is a bargain purchase
option...
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