CourseLover

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Teaching Since: May 2017
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  • MCS,MBA(IT), Pursuing PHD
    Devry University
    Sep-2004 - Aug-2010

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  • Assistant Financial Analyst
    NatSteel Holdings Pte Ltd
    Aug-2007 - Jul-2017

Category > Business & Finance Posted 07 Dec 2017 My Price 10.00

Prepare the schedule of lease payments

Lease:

London Ltd leases a motor vehicle from New York Ltd on 30 June 20x4. New York Ltd is financial lessor. The details of the lease arrangement are as follows.

  •  The lease term is three years
  •   The lease is cancellable, but the cancellation penalty is $30,000.
  •   The annual payment is $15,500 including an amount of $1500 to cover the maintenance and insurance costs paid for by New York Ltd, on behalf of London Ltd.
  •  Negotiation costs of $1000 were incurred by London Ltd at the inception of the lease arrangement.
  •  Payments are made annually on 30 June, commencing on 30 June 20x4.
  •  The residual value of the motor vehicle at the end of the lease term is $10,000. London Ltd guarantee 80% of the residual.
  •  The implicit interest rate in the lease is 6%
  •   The vehicle has an expected useful life of four years.
  •   At the end of the lease term, the vehicle was returned to New York Ltd.
  •  Lease arrangement costs of $600 were incurred by New York Ltd.

Required:

Prepare the schedule of lease payments for London Ltd and show the journal entries for the lease for the year ended 30 June 20x5.

Attachments:

Answers

CourseLover
(12)
Status NEW Posted 07 Dec 2017 01:12 PM My Price 10.00

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