On 1 July 2019 Sherlock Ltd leased a processing plant to Holmes Ltd . The plant was purchased by Sherlock Ltd on 1July 2019 for its fair value of $467,112 .The lease agreement contained the following details: Lease term
On 1 July 2019 Sherlock Ltd leased a processing plant to Holmes Ltd . The plant was purchased by Sherlock Ltd on 1July 2019 for its fair value of $467,112 .The lease agreement contained the following details: Lease term
On 1 July 2019 Sherlock Ltd leased a processing plant to Holmes Ltd . The plant was purchased by Sherlock Ltd on 1July 2019 for its fair value of $467,112 .The lease agreement contained the following details: Lease term
On 1 July 2019 Sherlock Ltd leased a processing plant to Holmes Ltd . The plant was purchased by Sherlock Ltd on 1July 2019 for its fair value of $467,112 .The lease agreement contained the following details:
Lease term 3 years Economic life of plant 5 years Annual rental payment in arrears commencing 30/6/2020 $150,000 Residual value at end of lease term $90,000 Residual guaranteed by lessee $60,000 Interest rate implicit in lease 7% The lease is cancellable only with permission of the lessor .
Holmes intends to return the processing plant to the lessor at the end of the lease term .The lease has been classified as a finance lease by both lessee and lessor . Required: (a) Prepare the lease payment schedule for the lessee (b) Prepare the journal entries in the records of the lessee for the years ended 30 June 2020 and 30 June 2021.
Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.