Use the information for Kingston plc from BE21.14. Prepare all the necessary journal entries for Falls Ltd.

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Use the information for Kingston plc from BE21.14. Prepare all the necessary journal entries for Falls Ltd. (the lessor) for 2019, assuming the equipment is carried at a cost of £200,000.
Kingston plc leases equipment from Falls Ltd. on January 1, 2019. The lease agreement does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. It covers 3 years of the equipment's 8-year useful life, and the present value of the lease payments is less than 90% of the fair value of the asset leased. Prepare Kingston's journal entries on January 1, 2019, and December 31, 2019. Assume the annual lease payment is £35,000 at the beginning of each year, and Kingston's incremental borrowing rate is 6%, which is the same as the lessor's implicit rate.
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Intermediate Accounting IFRS

ISBN: 978-1119372936

3rd edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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