Eagle limited is situated away from estableshed commuter routes and provides bus transport for its employees form the city centre to the factory . Eagle limited entered into a contract with Bigfin Limited for the lease of a bus.The model and the size of a bus is stated in the contract and Bigfin Limited sdoes not have substitution rights. The commencement date of the lease is 1 April 20x5 The lease is for a period of four years and requires four lease payments in advance of C110 000.The first payment is due on the 1 April 20x5 and the remaining three payments on 1 April 20x6,1 April 20x7 and 1 April 20x8. The contract stipulates a residual value guarantee of C80 000.At the inception of the lease ,Eagle Limited expects that the fair value of the bus at the end of the lease term will be C42 500.The estimated useful life of the bus is 6 years. Eagle limited incremental borrowing rate is 7 %. The following present value table is provided Present value of annuity in advance of C1 for four years ,discounted at 7% 3.62431 Present value of C1 in four years ,discounted at 7% 0.76289 The financial year end of Eagle limited is 31 March 1.1. Prepare the journal entries in the accounting records of Eagle limited for the year ended 31 March 20x6( the first year of contract) and 31 March 20x9 ( the last year of contract) 1.2.Prepare the extract from the statement of financial position of Eagle limited at 31 March 20x6 showing the disclosure of the non current assets, non current liabilities and current liabilities ,in accordance with International Financial Reporting Standards 1.3.Prepare the lease note to support the disclosure of the lease in the financial statements of Eagle Limited for the year ended 31 March 20x6 in accordance with International Financial Reporting Standards. Ignore tax and defferd tax Round your caclculatinons to the nearest whole number
Eagle limited is situated away from estableshed commuter routes and provides bus transport for its employees form the city centre to the factory .
Eagle limited entered into a contract with Bigfin Limited for the lease of a bus.The model and the size of a bus is stated in the contract and Bigfin Limited sdoes not have substitution rights.
The commencement date of the lease is 1 April 20x5 The lease is for a period of four years and requires four lease payments in advance of C110 000.The first payment is due on the 1 April 20x5 and the remaining three payments on 1 April 20x6,1 April 20x7 and 1 April 20x8.
The contract stipulates a residual value guarantee of C80 000.At the inception of the lease ,Eagle Limited expects that the fair value of the bus at the end of the lease term will be C42 500.The estimated useful life of the bus is 6 years.
Eagle limited incremental borrowing rate is 7 %. The following present value table is provided
Present value of annuity in advance of C1 for four years ,discounted at 7% 3.62431
Present value of C1 in four years ,discounted at 7% 0.76289
The financial year end of Eagle limited is 31 March
1.1. Prepare the
1.2.Prepare the extract from the
1.3.Prepare the lease note to support the disclosure of the lease in the financial statements of Eagle Limited for the year ended 31 March 20x6 in accordance with International Financial Reporting Standards.
Ignore tax and defferd tax
Round your caclculatinons to the nearest whole number
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