On 1 July 2019, True Ltd leased a plastic-moulding machine from Grit Ltd. The machine cost Grit Ltd $130 000 to manufacture and had a fair value of $154 109 on 1 July 2019. The lease agreement contained the following provisions. Lease term 4 Years Annual rental payment in advance on 1July each year $40,000 Residual value at end of lease term $15,000 Residual guaranteed by lessee nil Interest rate implicit in lease 8% The lease is cancellable only with the permission of the lessor The expected useful life of the machine is 6 years. True Ltd intends to return the machine to the Grit Ltd at the end of the lease term.. Required 1. Prepare the lease payments schedule for the True Ltd (show all workings). 2. Prepare the journal entries in the books of True Ltd for the year ended 30 June 2020 and 30 June 2021.
On 1 July 2019, True Ltd leased a plastic-moulding machine from Grit Ltd. The machine cost Grit Ltd $130 000 to manufacture and had a fair value of $154 109 on 1 July 2019. The lease agreement contained the following provisions. Lease term 4 Years Annual rental payment in advance on 1July each year $40,000 Residual value at end of lease term $15,000 Residual guaranteed by lessee nil Interest rate implicit in lease 8% The lease is cancellable only with the permission of the lessor The expected useful life of the machine is 6 years. True Ltd intends to return the machine to the Grit Ltd at the end of the lease term.. Required 1. Prepare the lease payments schedule for the True Ltd (show all workings). 2. Prepare the journal entries in the books of True Ltd for the year ended 30 June 2020 and 30 June 2021.
On 1 July 2019, True Ltd leased a plastic-moulding machine from Grit Ltd. The machine cost Grit Ltd $130 000 to manufacture and had a fair value of $154 109 on 1 July 2019. The lease agreement contained the following provisions. Lease term 4 Years Annual rental payment in advance on 1July each year $40,000 Residual value at end of lease term $15,000 Residual guaranteed by lessee nil Interest rate implicit in lease 8% The lease is cancellable only with the permission of the lessor The expected useful life of the machine is 6 years. True Ltd intends to return the machine to the Grit Ltd at the end of the lease term.. Required 1. Prepare the lease payments schedule for the True Ltd (show all workings). 2. Prepare the journal entries in the books of True Ltd for the year ended 30 June 2020 and 30 June 2021.
On 1 July 2019, True Ltd leased a plastic-moulding machine from Grit Ltd. The machine cost Grit Ltd $130 000 to manufacture and had a fair value of $154 109 on 1 July 2019. The lease agreement contained the following provisions.
Lease term 4 Years Annual rental payment in advance on 1July each year $40,000 Residual value at end of lease term $15,000 Residual guaranteed by lessee nil Interest rate implicit in lease 8% The lease is cancellable only with the permission of the lessor
The expected useful life of the machine is 6 years. True Ltd intends to return the machine to the Grit Ltd at the end of the lease term..
Required 1. Prepare the lease payments schedule for the True Ltd (show all workings). 2. Prepare the journal entries in the books of True Ltd for the year 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.
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