ю1eBookRavi Inc enters into a lease agreement to rent out construction equipment. The lease term is 1 year, and there are no renewal orpurchase options. The fair value of the equipment is $22,000, and the monthly payments are $700, beginning on August 1, 20X4. ReviInc elects to expense leases that are short term or low value in nature.Required:Prepare the journal entry to record lease payment by Ravi in August, using IFRS. (If no entry is required for a transaction/event.select "No joumal entry required" in the first account field.)View transactionJournal entry worksheet<Prepare the journal entry to record lease payment in August:Note: Enter debits before creditsDateAugust 1, 2004Genaral JournalDebitCreditRecord entryClear entryView general journal

Step : Introduction to the Question Under IFRS 16, Ravi Inc would need to determine if the lease…

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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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Problem 1 Whistler Inc. signed a 6 year non-cancelable lease at the beginning of the year. The leased equipment has a 9 year economic life. The fair value of the leased equipment is $29,000. Annual lease payments due at the beginning of each year are $5,200. There is no bargain purchase option, and the leased asset reverts to the lessor at the end of the lease term. The implicit rate of interest on the lease (known by the lessee) is 6%. Collection of all lease payments is reasonably assured. Part A. What is the classification of this lease from the perspective of the lessee? Part B. What is the classification of this lease from the perspective of the lessor?
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Question 3 Apparel Leasing Company signs a lease agreement on January 1, 2021, to lease equipment to Oman Company. The term of the non-cancelable lease is 8 years, and payments are required at the end of each year. The following information related to this agreement: 1. The equipment has a cost and fair value of $9,500,000 to Apparel, an estimated useful life of 10 years, and no residual value at the end of that time. Annual lease rental is $1,441,606. 2. Apparel Company desires to earn an 8% return on its investment. Instructions: A) Prepare an amortization schedule for the lessor for 2021 and 2022. B) Prepare the journal entries on the lessor's books on January 1, 2021 and December 31, 2021.
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Instructions General Journal Shaded cells have feedback. X Chart of Accounts Sax Company signs a lease agreement dated January 1, 2019, that provides for it to lease computers from Appleton Company beginning January 1, 2019. The lease terms, 4a. Prepare journal entries for Sax for the year 2019. CHART OF ACCOUNTS provisions, and related events are as follows: Sax Company 1. The lease term is 5 years. The lease is noncancelable and requires equal rental payments to be made at the end of each year. The computers General Journal Instructions General Ledger are not specialized for Sax. 2. The computers have an estimated life of 5 years, a fair value of $300,000, and a zero estimated residual value. ASSETS REVENUE How does grading work? 3. Sax agrees to pay all executory costs directly to a third party. 111 Cash 411 Sales Revenue PAGE 2019 4. The lease contains no renewal or bargain purchase options. 121 Accounts Receivable 5. The annual payment is set by Appleton at $83,222.92 to earn a…
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Mining Type of Lease and Subsequent Accounting Instructions On January 1, 2016, Ballieu Company leases specialty equipment with an economic life of 8 years to Anderson Company. The lease contains the following terms and provisions: Chart of Accounts Next Level General Journal • The lease is noncancelable and has a term of 8 years. • The annual rentals are $39,200, payable at the beginning of each year. The interest rate implicit in the lease is 11%. Anderson agrees to pay all executory costs and is given an option to buy the equipment for $1 at the end of the lease term, December 31, 2024. • The cost of the equipment to the lessor is $145,500, and the fair retail value is approximately $223,900. The lessor incurs no material initial direct costs. EE The collectibility of the rentals is reasonably assured, and there are no important uncertainties surrounding the amount of unreimbursable costs yet to be incurred by the lessor. • The lessor estimates that the fair value is expected to be…
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