South Ltd agreed to pay for the insurance and maintenance of the vehicle, the latter to be carried out by North Ltd at regular intervals. The cost of these services is valued at $3000 p.a. The vehicle had an expected useful life of 4 years. The expected residual value of the vehicle at 30 June 2022 was $12 000. Costs of maintenance and insurance incurred by South Ltd over the years ended 30 June 2020 to 30 June 2022 were $2810, $3020 and $2750 respectively. At 30 June 2022, Jane returned the vehicle to South Ltd. Assume that the lease is classified as a finance lease by South Ltd. Required 1. Prepare the lease receipts schedule for South Ltd. 2. Prepare the journal entries in the books of South Ltd from 1 July 2019 to 30 June 2022.
South Ltd agreed to pay for the insurance and maintenance of the vehicle, the latter to be carried out by North Ltd at regular intervals. The cost of these services is valued at $3000 p.a. The vehicle had an expected useful life of 4 years. The expected residual value of the vehicle at 30 June 2022 was $12 000. Costs of maintenance and insurance incurred by South Ltd over the years ended 30 June 2020 to 30 June 2022 were $2810, $3020 and $2750 respectively. At 30 June 2022, Jane returned the vehicle to South Ltd. Assume that the lease is classified as a finance lease by South Ltd. Required 1. Prepare the lease receipts schedule for South Ltd. 2. Prepare the
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