On 1 July 2019, Tasman Ltd contracts to lease equipment for five years at an annual rental
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Question:
On 1 July 2019, Tasman Ltd contracts to lease equipment for five years at an annual rental of $20 000 with the first payment payable immediately. The equipment could have been purchased from the supplier for $80,747. The rate of interest implicit in the lease is 12% and the end of the reporting period is 30 June.
- Prepare general journal entries for the year ended 30 June 2020, assuming the lease is an operating lease.
- Prepare general journal entries for the year ended 30 June 2020, assuming the lease is a finance lease.
- Prepare a schedule showing the division of the lease rental into interest and principal components for the first two years.
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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