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Python Company leased equipment from Hope Leasing on January 1, 2018. Hope purchased the equipment at a cost of OMR 58,684. Other information: Lease term   4 year Semiannual payments  OMR 10,000 on January 1, June 30 Life of asset  4 years Fair value of asset  OMR 58,684 Implicit interest rate   10 % Incremental rate  10 % There is no expected residual value. Required: Prepare appropriate journal entries for the lessee, and lessor Company, for 2018. Assume straight-line depreciation and a December 31 year-end.

Python Company leased equipment from Hope Leasing on January 1, 2018. Hope purchased the equipment at a cost of OMR 58,684. Other information: Lease term   4 year Semiannual payments  OMR 10,000 on January 1, June 30 Life of asset  4 years Fair value of asset  OMR 58,684 Implicit interest rate   10 % Incremental rate  10 % There is no expected residual value. Required: Prepare appropriate journal entries for the lessee, and lessor Company, for 2018. Assume straight-line depreciation and a December 31 year-end.

FINANCIAL ACCOUNTING
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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Exercise 5.1:
Python Company leased equipment from Hope Leasing on January 1, 2018. Hope purchased the equipment at a cost of OMR 58,684.
Other information:
Lease term   4 year
Semiannual payments  OMR 10,000 on January 1, June 30
Life of asset  4 years
Fair value of asset  OMR 58,684
Implicit interest rate   10 %
Incremental rate  10 %
There is no expected residual value.
Required:
Prepare appropriate journal entries for the lessee, and lessor Company, for 2018. Assume straight-line depreciation and a December 31 year-end.

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