Required A. Prepare the lease payment schedule for the lessee (show all workings); and B. Prepare the lease receipt schedule for the lessor (show all workings)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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11. On 1 July 2020, Sami Ltd leased a machine from Jimmy Ltd.
The machine cost Jimmy Ltd OMR1,300,000 to manufacture
and had a fair value of OMR1,541,090 on 1 July 2020. The lease
agreement contained the following provisions:
Lease term
|4 years
|Annual rental payment, in advance on 1 July each year OMR 415,000|
Residual value at end of the lease term
Residual guaranteed by lessee
Interest rate implicit in lease
The lease is cancellable only with the permission of the lessor.
OMR 150,000
nil
8%
The expected useful life of the machine is 6 years. Sami Ltd
intends to return the machine to the lessor at the end of the lease
term. Included in the annual rental payment is an amount of
OMR15,000 to cover the costs of maintenance and insurance paid
for by the lessor.
Required
A. Prepare the lease payment schedule for the lessee (show all
workings); and
B. Prepare the lease receipt schedule for the lessor (show all
workings)
Transcribed Image Text:11. On 1 July 2020, Sami Ltd leased a machine from Jimmy Ltd. The machine cost Jimmy Ltd OMR1,300,000 to manufacture and had a fair value of OMR1,541,090 on 1 July 2020. The lease agreement contained the following provisions: Lease term |4 years |Annual rental payment, in advance on 1 July each year OMR 415,000| Residual value at end of the lease term Residual guaranteed by lessee Interest rate implicit in lease The lease is cancellable only with the permission of the lessor. OMR 150,000 nil 8% The expected useful life of the machine is 6 years. Sami Ltd intends to return the machine to the lessor at the end of the lease term. Included in the annual rental payment is an amount of OMR15,000 to cover the costs of maintenance and insurance paid for by the lessor. Required A. Prepare the lease payment schedule for the lessee (show all workings); and B. Prepare the lease receipt schedule for the lessor (show all workings)
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