Argyle Ltd. signed a 36-month lease to rent a new computer for $170 per month. The...

  
 

Transcribed Image Text:

Argyle Ltd. signed a 36-month lease to rent a new computer for $170 per month. The fair value of the computer is $3,300. The lease will commence on 1 November 20X1 with payments beginning immediately. Assume that Argyle Ltd.'s IBR is 0.6% per month. Argyle is unaware of the implicit rate in the lease. (PV of $1. PVA of $1, and PVAD of S1.) (Use appropriate factor(s) from the tables provided.) Required: 1-a, Is Argyle Ltd. able to account for this lease as a low-value lease? Yes O No 1-b. What journal entry would be recorded for this lease? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2-a. Argyle Ltd. is able to find a used computer for $130 per month instead of having to pay $170 per month. The fair value of the asset in its current condition is $2,400 but when new, the computer costs slightly over $5,900. Is Argyle Ltd. able to account for this lease as a low-value lease? O Yes No 2-b. What journal entry would be recorded for this lease? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar amount.) 2-b. What journal entry would be recorded for this lease? (If no entry is required for a transaction/event, sele required" in the first account field. Round your final answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet A Record the lease asset and lease liability. Note: Enter debits before credits. Transaction General Journal Debit Credit ROU asset - computer Lease liability Cash 130 Record entry View general journal Clear entry Argyle Ltd. signed a 36-month lease to rent a new computer for $170 per month. The fair value of the computer is $3,300. The lease will commence on 1 November 20X1 with payments beginning immediately. Assume that Argyle Ltd.'s IBR is 0.6% per month. Argyle is unaware of the implicit rate in the lease. (PV of $1. PVA of $1, and PVAD of S1.) (Use appropriate factor(s) from the tables provided.) Required: 1-a, Is Argyle Ltd. able to account for this lease as a low-value lease? Yes O No 1-b. What journal entry would be recorded for this lease? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2-a. Argyle Ltd. is able to find a used computer for $130 per month instead of having to pay $170 per month. The fair value of the asset in its current condition is $2,400 but when new, the computer costs slightly over $5,900. Is Argyle Ltd. able to account for this lease as a low-value lease? O Yes No 2-b. What journal entry would be recorded for this lease? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar amount.) 2-b. What journal entry would be recorded for this lease? (If no entry is required for a transaction/event, sele required" in the first account field. Round your final answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet A Record the lease asset and lease liability. Note: Enter debits before credits. Transaction General Journal Debit Credit ROU asset - computer Lease liability Cash 130 Record entry View general journal Clear entry

Answer rating: 100% (QA)

Solution Yes you are correct about 1 and 2a As per IFRS 16 Lease can be classified as low value leas... View the full answer