Provide a journal of the lease expense for the period ended 31 December 2022 The lease commenced on 1 May 2020 and 31 December is the year end. The lease payment is R1200 per month for the first year and R1450 per month for the second year.

Provide a journal of the lease expense for the period ended 31 December 2022 The lease commenced on 1 May 2020 and 31 December is the year end. The lease payment is R1200 per month for the first year and R1450 per month for the second year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: On 1 July 2019, Fisher Ltd decides to lease a cargo ship from XFinance Ltd. The term of the lease is…

A: Journal entry is a process of recording financial transaction with debit and credit columns along…

Q: During the year ended 30 September 2021 Hanlon Plc entered into two lease transactions. On 1…

A: Leases are agreements whereby the owner of a property or asset grants another party the right to use…

Q: Lessee Company enters into a lease on January 1, 2021, that is accounted for as a finance lease. The…

A: Lease is an agreement between lessee and lessor where lessor gives his assets to lessee for use in…

Q: On June 1, 2024, First National leased a building. The lease agreement calls for First National to…

A: Lease: It implies to a contract where by one party (lessor) agrees to grant the right of using an…

Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $26,269 over…

A: The lease is an option where one party can take an asset on rent from another party and there is no…

Q: On December 31, 2020, the lease agreement owned by Bahtera Maju (Tenant) and Sejahtera (the lessor)…

A: Capital lease: A lease is said to be a Capital Lease if the lease terms contain one of the following…

Q: On August 31, 2021, Prince Corp. made the annual lease payment of $63,000 for its office building.…

A: Lease expense paid for 12 months On 31 March, we have to book amortize the prepaid expenses for 7…

Q: Wildhorse Manufacturing Ltd. has signed a lease agreement with Blossom Leasing Inc. to lease some…

A: The term "lease" refers to a contract between two business entities under which one provides an…

Q: Wall finalised a lease arrangement with deliverrite on 1 July 2022 for a fleet of delivery vehicles…

A: Lease is defined a contractual agreement incorporated between two business entities where one entity…

Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $20,000 over…

A: A lease is an agreement between two parties in which one party provides assets on rent to another…

Q: ed: Calculate the yearly payment that Alexis will charge Edgar under this lease agreement if…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Three different lease transactions are presented below for Crane Enterprises. Assume that all lease…

A: A lease is defined as a contractual agreement incorporated between two business entities where one…

Q: What amount should be included in current liabilities on Dec 31, 2021 in relation to the lease? *…

A: The question is related to Accounting for Lease. The question is related to Finance lease. The lease…

Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $40,000 over…

A: A lease is defined as a contractual agreement incorporated between two business entities where one…

Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $25,000 over…

A: The lease is an option where one party can take an asset for rent from another party and there is no…

Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $50,000 over…

A: Lease is an aggreement between lessor and lessee where lessor gives his assets to lessee for use in…

Q: ok nt ences A finance lease agreement calls for quarterly lease payments of $7,056 over a 10-year…

A: Required A: Partial Amortization TableDateLease PaymentEffective InterestDecrease in…

Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $50,000 over…

Q: Sax Company signs a lease agreement dated January 1, 2016, that provides for it to lease computers…

A: Lease considered to be an agreement taken place between two parties known as lessee and lessor. Here…

Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

Provide a journal of the lease expense for the period ended 31 December 2022 The lease commenced on 1 May 2020 and 31 December is the year end. The lease payment is R1200 per month for the first year and R1450 per
month for the second year.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Calculation of Lease Expense for the year ending 31/12/2022

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

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.

Similar questions

A lease agreement that qualifies as a finance lease calls for annual lease payments of $40,000 over a six-year lease term (also the asset's useful life), with the first payment on January 1, the beginning of the lease. The interest rate is 7%. Required: If the lessee's fiscal year is the calendar year, what would be the amounts related to the lease that the lessee would report in its income statement for the first year ended December 31 (ignore taxes)?
On January 1, 2021 a company enters a 12-month lease contract for a new laser copier machine. The lease contract legally binds the company to make twelve $2,500 monthly lease payments at the beginning of each month January 1 through December 1, 2021. a. On December 31, 2020 before the lease contract is signed, what is the avoidable cost of leasing the machine for the 2021 production period? What is the economic cost? b. After the lease contract is signed on January 1, what is the avoidable cost of using the machine for the rest of 2021? What is the economic cost? Now suppose the lease agreement is modified by adding a clause that gives the company the right to rent the laser copier to another company during 2021 lease period. The machine can be rented for $1,000 per month. c. What is the amount of the sunk cost on January 1 after the lease is signed? d. What is the amount of the sunk cost on August 1? e. What is the monthly avoidable (and economic) cost of using the laser copier…
A lease agreement that qualifies as a finance lease calls for annual lease payments of $26,269 over a six-year lease term (also the asset’s useful life), with the first payment on January 1, the beginning of the lease. The interest rate is 5%. Required: Complete the amortization schedule for the first two payments. If the lessee’s fiscal year is the calendar year, what would be the amount of the lease liability that the lessee would report in its balance sheet at the end of the first year? What would be the interest payable?
Date of commencement of lease - July 1, 2022 Duration of lease - 8 years Implicit rate of interest - 6% Initial up-front payment - P200,000 Lease payments at the end of each year - P100,000
Provide all journal entries that Kelly K. inc. will record over the whole term of the lease.
On July 1, 2020, Shroff Company leased a warehouse building under a 10-year lease agreement. The lease requires quarterly lease payments of $4,500. The first lease payment is due on September 30, 2020. The lease was reported as a finance lease using an 8% annual interest rate. a. Prepare the journal entry to record the commencement of the lease on July 1, 2020. b. Prepare the journal entries that would be necessary on September 30 and December 31, 2020. c. Post the entries from parts a and b in their appropriate T-accounts. d. Prepare a financial statement effects template to show the effects template to show the effects of the entries from parts a and b on the balance sheet and income statement.
On 1 March 2020,the company entered into a lease agreement in order to lease a manufacturing machine with a costprice of R250 000 (VAT inclusive). The period of the lease is five years, and the useful life of the machinery is estimatedat six years. The following is an extract from the lease agreement:4.1.1 Ownership of the machinery will be transferred to the Lessee at the end of the lease.4.1.2 Should the Lessee cancel the lease, the Lessor’s losses will be borne by the Lessee.Monthly instalments are payable in arrears and amount to R5 947 (VAT inclusive). The company used themanufacturing machine for a qualifying purpose. The company is a registered VAT vendor.Required:Provide the deferred tax movement per the balance sheet method for the lease agreement for the financial year ending31 December 2021. Clearly indicate whether the movement represents an income or an expense. Note:- Show all calculations, marks are awarded for calculations.- You may round off to the nearest Rand.
On January 1, 2024, Stone leased an office building. Terms of the lease require Stone to make 20 annual lease payments of $124, 000 beginning on January 1, 2024. An 11% interest rate is implicit in the lease agreement. At what amount should Stone record the lease liability on January 1, 2024, before any lease payments are made? Note: Round your final answers to nearest whole dollar amount. Show less Table, Excel, or calculator function Table, Excel, or calculator function: Payment: n = i : Liability: =
How would you calculate a lease payment under IFRS 16? 3-year lease, $600 payments due at the end of every month of the lease term, 6% borrowing rate. What would the first month expense be? Ch 5, question 13. International accoutning
On 1 July 2019, Fisher Ltd decides to lease a cargo ship from XFinance Ltd. The term of the lease is 20years. The implicit interest rate in the lease is 10 per cent. The fair value of the cargo ship at thecommencement of the lease is $2,215,560. The lease is non-cancellable, and requires a lease paymentof $300,000 on inception of the lease (on 1 July 2019) and lease payments of $250,000 on 30 Juneeach year (starting 30 June 2020). Included within the $250,000 lease payments is an amount of$25,000 representing payment to the lessor for the insurance and maintenance of the cargo ship.There is no residual payment required. Annuity factor, n=20; r = 10% is 8.5136.Required:a) Prove that the interest rate implicit in the lease is 10 per cent. b) Provide the entries for the lease in the books of Fisher Ltd as at 1 July 2019, and 30 June 2020.c) Provide the entries for the lease in the book of Xfinance limited as at 1 July 2019, and 30 june 2020.