Debbink plc leased machinery from Young Ltd. on January 1, 2022. The lease term was for 8
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Debbink plc leased machinery from Young Ltd. on January 1, 2022. The lease term was for 8 years, with equal annual rental payments of £5,300 at the beginning of each year. In addition, the lease provides an option to purchase the machinery at the end of the lease term for £2,000, which Debbink is reasonably certain it will exercise, as it believes the fair value of the machinery will be at least £6,000. The machinery has a useful life of 10 years and a fair value of £36,000. The implicit rate of the lease is not known to Debbink. Debbink’s incremental borrowing rate is 8%. Prepare Debbink’s 2022 journal entries.
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Related Book For
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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