On 1 January 2019, Time Limited entered into a four-year contract to lease a machine. The annual lease payments are£20,000, payable in arrears on 31 December each year. The interest rate implicit in the lease is 10%. There were no initialdirect costs. The first lease instalment was paid on 31 December 2019.Time Limited calculates depreciation on a straight-line basis and the machine is expected to have no residual value at theend of the lease term.RequirementBased upon the information provided above, prepare extracts for the financial statements of Time Limited for the year ended31 December 2019 in accordance with IFRS 16 Leases.Q1 What is the value of the lease liability at the inception of the lease on 1 January 2019 in accordance with IFRS 16Leases?Group of answer choices£20,000£63,38049,380£80,000Q2What is value of the current lease liability on 31 December 2019 in accordance with IFRS 16 Leases?Group of answer choices£34,690£18,180£49,718£15,028Q3What is the total value of the lease liability on 31 December 2019 in accordance with IFRS 16 Leases?Group of answer choices£60,000£80,000£69,718£49,718

Q1 What is the value of the lease liability at the inception of the lease on 1 January 2019 in accordance with IFRS 16 Leases? Group of answer choices £20,000 £63,380 49,380 £80,000 Q2 What is value of the current lease liability on 31 December 2019 in accordance with IFRS 16 Leases? Group of answer choices £34,690 £18,180 £49,718 €15028

Q1 What is the value of the lease liability at the inception of the lease on 1 January 2019 in accordance with IFRS 16 Leases? Group of answer choices £20,000 £63,380 49,380 £80,000 Q2 What is value of the current lease liability on 31 December 2019 in accordance with IFRS 16 Leases? Group of answer choices £34,690 £18,180 £49,718 €15028

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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23. Partially correct answer icon Your answer is partially correct. Tamarisk Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7 annual payments of $38,200 each, beginning December 31, 2019. In addition, Tamarisk guarantees the lessor a residual value of $18,500 at the end of the lease. However, Tamarisk believes it is probable that the expected residual value at the end of the lease term will be $8,500. The equipment has a useful life of 7 years. Assume that for Lost Ark Company, the lessor, collectibility of lease payments is probable and the carrying amount of the equipment is $170,000.Prepare Lost Ark’s 2019 and 2020 journal entries, assuming the implicit rate of the lease is 11% and this is known to Tamarisk. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal…