Hd.23. On January 1, 2021, Aylmer (follows IFRS) decided to lease a machine. The accountant at the time did not know how torecord this asset. NO TRANSACTIONS relating to leases were recorded. The following information pertains to the leasedmachine:The lease term is 6 years and the economic life of the asset is 7 years.The annual payment is $22,740. This payment includes annual executory costs (insurance) of $890. The remainder is thelease payment.Interest rate associated with this lease is 5.75%.In the Excel spreadsheet, see the tab labelled "Leased Liability" to make the appropriate calculations and requirements forreconciling the lease information.Present Value Calculation & Amortization SchedulePVRateNperPymtFVTypeRequired: Prepare all the appropriate entries (including setup up the asset, the liability and any payments and interest) forthe year 2021

Given Lease Term = 6 years Annual lease payment = $22740 Economic Life of asset =7 years Interest…

Answered: "Leased Liability":

Business

Accounting

"Leased Liability":

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

Hd.23.

On January 1, 2021, Aylmer (follows IFRS) decided to lease a machine. The accountant at the time did not know how to
record this asset. NO TRANSACTIONS relating to leases were recorded. The following information pertains to the leased
machine:
The lease term is 6 years and the economic life of the asset is 7 years.
The annual payment is $22,740. This payment includes annual executory costs (insurance) of $890. The remainder is the
lease payment.
Interest rate associated with this lease is 5.75%.
In the Excel spreadsheet, see the tab labelled "Leased Liability" to make the appropriate calculations and requirements for
reconciling the lease information.
Present Value Calculation & Amortization Schedule
PV
Rate
Nper
Pymt
FV
Type
Required: Prepare all the appropriate entries (including setup up the asset, the liability and any payments and interest) for
the year 2021

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