Barry Limited (lessee) entered into a finance lease agreement with the following terms: lease term is 4 years estimated economic life of the leased asset (equipment) is 5 years Right of use asset amount at the inception was $85,695 Annual lease payments of $30,000 each payable in advance. residual value at the end of the lease term is $5,000 but no amount was guaranteed by the lessee Which one of the following is correct for Barry Limited? Select one: Depreciation entry; Dr Depreciation $16,139 Cr Accumulated depreciation $16,139 To record the asset at the inception; Dr Right of use asset $85,695 Cr Cash $30,000 Cr Lease liability $55,695 Depreciation entry; Dr Depreciation $20,174 Cr Accumulated depreciation $20,174 To record the asset at the inception; Dr Right of use asset $85,695 Cr Cash $30,000 Cr Equipment $55,695
Barry Limited (lessee) entered into a finance lease agreement with the following terms:
lease term is 4 years
estimated economic life of the leased asset (equipment) is 5 years
Right of use asset amount at the inception was $85,695
Annual lease payments of $30,000 each payable in advance.
residual value at the end of the lease term is $5,000 but no amount was guaranteed by the lessee
Which one of the following is correct for Barry Limited?
Select one:
Dr Depreciation $16,139
Cr
To record the asset at the inception;
Dr Right of use asset $85,695
Cr Cash $30,000
Cr Lease liability $55,695
Depreciation entry;
Dr Depreciation $20,174
Cr Accumulated depreciation $20,174
To record the asset at the inception;
Dr Right of use asset $85,695
Cr Cash $30,000
Cr Equipment $55,695
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