Due to increase demand for scenic flights in Sydney because of international travel restrictions, on 1 July 2021 lconic Flights Lto decides to lease a Helicopter from Access Finance Ltd. The term of the lease is 20 years.
The implicit interest rate in the lease is 10 per cent. lt is expected that the Helicopter will be scrapped at the end of the lease term The fair value of the boat at the commencement of the lease is $2,095,424.
The lease is non-cancellable, returns the Helicopter to Access Finance at the end of the lease and requires a lease payment ot$265,000 on inception of the lease (on 1 July 2021) and lease payments of $215,000 on 30 June each year (starting 30 June 2022). There is no residual payment required. 

REQUIRED
1.1 Provide the entries for the lease in the books of lconic Flights as at 1 July 2021.
1.2 Provide the entries for the lease in the books of Access Finance as at 1 July 2021.
1.3 Provide the journal entries in the books of lconic Flights for the final year of the lease (that is, the entry in 20 vears' time).
1.4 Provide the journal entries in the books of Access Finance for the final year of the lease (that is, the entry in 20 years' time).

Answer rating: 100% (QA)

11 Journal entries in the books of Iconic Flights as at 1 July 2021 Date July 1 2021 Account Debit H... View the full answer