. Prepare the lease schedules for Harry Ltd 2. Prepare the journal entries in the records of Harry Ltd only for the year ended 30 June 2021.
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On 1 July 2020, Harry Ltd leased a crane from Potter Ltd. The crane cost Potter Ltd
$120 307, considered to be its fair value on that same day. The finance lease agreement contained the following provisions as:
Required
1. Prepare the lease schedules for Harry Ltd
2. Prepare the
June 2021.
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- The lessor and the lessee entered into a lease agreement on 1 January 2019. On that date, the lease liability recorded by the lessee was OMR 40,000. The interest rate is 10%. The amount of interest expense to be recognized on 31 December 2019 is: a. OMR 400 b. Amount can't be determined c. OMR 4,000 d. OMR 40,000On September 1, 2021, AYE Company entered into one-year nonrenewable lease, commencing on thatdate, for an office space and made the following payments to XYZ Properties:• Bonus to obtain lease - ₱ 120,000• First month’s rent - ₱ 40,000• Last month’s rent - ₱ 40,000The lease is considered “Short-term lease” in its income statement for the year ended Dec. 31, 2021. What amount should AYE report as rent expense for the year ended, December 31, 2021?On 1 January 2022 Hull Ltd entered into a 10-month lease for a retail unit. Lease rent were £12,000 per month payable in advance. As an incentive however, Hull Ltd was given the first month as a rent-free period. Required Calculate the rent expense which should be recognised in Hull Ltd' statement of profit or loss for the year ended 31 March 2022. Assume that Hull Ltd elects to use the short-term lease exemption under IFRS 16.
- Leasing AG agrees to lease equipment to Fat Choi Furniture on January 1, 2020. The following information relates to the lease agreement.(Assume the accounting period ends on December 31.)a) Calculate the amount of the annual rental payment required. b) Compute the value of the lease liability to Fat Choi Furniture. c) Prepare an 8-year lease amortization schedule for the lessee, Fat Choi Furniture.On 1 July 2019, True Ltd leased a plastic-moulding machine from Grit Ltd. The machine cost Grit Ltd $130 000 to manufacture and had a fair value of $154 109 on 1 July 2019. The lease agreement contained the following provisions.Lease term 4 YearsAnnual rental payment in advance on 1July each year $40,000Residual value at end of lease term $15,000Residual guaranteed by lessee nilInterest rate implicit in lease 8%The lease is cancellable only with the permission of the lessorThe expected useful life of the machine is 6 years. True Ltd intends to return the machine to the Grit Ltd at the end of the lease term..Required1. Prepare the lease payments schedule for the True Ltd (show all workings).2. Prepare the journal entries in the books of True Ltd for the year ended 30 June 2020 and 30 June 2021.Rib Ltd signed a 4-year contract with Pillman Ltd for the use of a customised machinery on 1 July 2020. Rib Ltd intends to return the asset at the end of the lease term. The leased machinery meets the criteria of a leased asset in accordance with AASB16 Leases. The following information shows the lease terms: Lease term (non-cancellable) Expected useful life of the machinery Expected fair value of the machinery at the end of lease term Residual value guaranteed at the end of lease term Purchase option price at the end of lease term Net initial directly attributable costs (paid on 1 July 2020) Annual lease payment (1st payment, 30 June 2021) Annual maintenance & insurance included in the annual lease payment Interest rate implicit in the lease What is the amount to be recorded as a Non- Current Lease Liability in the books of Rib Ltd that is i accordance with AASB16 Leases on 30 June 2022? $136,364 $121,488 $190,909 4 years 8 years $40 000 $70 000 $350 000 $20 000 $180 000 $30 000 10%…
- On 1 July 2020, Table Ltd leased equipment from Chair Ltd. The following are details of the equipment and the lease contract: On 1 July 2020 equipment has a fair value of $110,000 (at fair value in Chair Ltd’s accounts) Lease term is 5 years, useful life of the equipment is 6 years, and Table Ltd will return the equipment at the end of the lease term Lease payments are in advance and will be paid on 1 July of each year, starting 1 July 2020, with $24,000 as the annual payment Residual value of the equipment at the end of the lease term is $8,000, with Table Ltd guaranteeing 75% of the residual value The interest rate implicit in the lease arrangement is 6%. In setting up the lease arrangement Table Ltd incurred costs of $2,354, while Chair Ltd incurred costs of $3,141. Required: a) Prepare the necessary journal entries for Table Ltd on 1 July 2020. b) Calculate interest and depreciation expense incurred on 30 June…On June 1, 2021 Maroon Company entered into a 5-year nonrenewable lease, commencing on that date, for office space and made the following collections from the lessee: • Bonus to obtain lease, P300,000 First month's rent, P100,000 • Last month's rent, P100,000 In its income statement for the year ended June 30, 2021, what amount should Maroon report as rent income?1. Refer to Item 4. At what amount should the lease liability be recognized at January 1, 2022, after making the first payment of P260,000 to the lessor? 2. Assuming that the residual value of the two automobiles amounted to P150,000 at the end of the lease term, prepare the journal entry to record the transfer of the leased automobiles to the lessor.
- Assume that on December 31, 2021, Stora Enso (FIN) signs a 10-year, non-cancelable leaseagreement to lease a storage building from Sheffield Storage. The following information pertains to this lease agreement. 1. The agreement requires equal rental payments of €71,830 beginning on December 31, 2021. 2. The fair value of the building on December 31, 2021, is €525,176. 3. The building has an estimated economic life of 12 years, a guaranteed residual value of €10,000, and an expected residual value of €7,000. Stora Enso depreciates similar buildings using the straight-line method. 4. The lease is non-renewable. At the termination of the lease, the building reverts to the lessor. 5. Stora Enso’s incremental borrowing rate is 8% per year. The lessor’s implicit rate is not known by Stora Enso. Instructions Prepare the journal entries on the lessee’s books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2021, 2022, and…On September 30, 2024, Truckee Garbage leased equipment from a supplier and agreed to pay $125,000 annually for 15 years beginning September 30, 2025. Generally accepted accounting principles require that a liability be recorded for this lease agreement for the present value of scheduled payments. Accordingly, at inception of the lease, Truckee recorded a $1,214,031 lease liability. Required: Determine the interest rate implicit in the lease agreement. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Interest rate implicit % 2ABC Company leases a machinery from XYZ Company under a twelve-month operating lease. As an inducement to enter the lease, XYZ Company grants ABC free rent for the first two months. The lease is effective September 1, 2020 and provides for monthly rental of P12,000 to begin on November 1, 2020. 1.Compute for the rent expense for 2021 2.Determine the total net income to be recognized by the Lessor for the year 2020 as a result of this lease.