sultan company leased machinery from Fatima Inc. on Jan 1, 2021. The lease was recorded as a finance lease and cost 60,000. Annual rentals Of 17,208 are to be paid each year end (December). The lease is for 4 years and it has no residual value. Sultan borrowing rate is 10%. The economic life is 4 years. The first payment is Jan 1 2021. The second and subsequent payments are on 31 December (year end). a. Is this a finance lease? Explain why b. Record the journal entry for the lessee for the initial or beginning of lease using pv of 3.48685

Q: Classify the Costs for Financial Statements?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: State the meaning of Income and Expenditure Account.

A: Accounting:   It refers to the process of recording the financial transactions of an organization…

Q: Distinguish between Income and Expenditure Account and Receiptand Payment Account.

A: Difference between income and expenditure account and receipt and payment account:

Q: Explain Bill-and-hold concept.

A:

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.