On January 1, 2017, XYZ Company signed an 10-year lease agreement for equipment. Annual payments are...

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On January 1, 2017, XYZ Company signed an 10-year lease agreement for equipment. Annual payments are Ro.18,500 at the beginning of each year. At the end of the lease, the equipment will revert to the lessor. The equipment has a useful life of 8 years and has no residual value. At the time of the lease agreement, the equipment has a fair value of Ro.156,000. An interest rate of 14% and straight-line depreciation are used. A. You are required to show at which leased asset will be recorded in the books of lessee. B. Identify the type of lease c. Lease amortization schedule D. Show the accounting treatment in the books of lessee. On January 1, 2017, XYZ Company signed an 10-year lease agreement for equipment. Annual payments are Ro.18,500 at the beginning of each year. At the end of the lease, the equipment will revert to the lessor. The equipment has a useful life of 8 years and has no residual value. At the time of the lease agreement, the equipment has a fair value of Ro.156,000. An interest rate of 14% and straight-line depreciation are used. A. You are required to show at which leased asset will be recorded in the books of lessee. B. Identify the type of lease c. Lease amortization schedule D. Show the accounting treatment in the books of lessee.

Answer rating: 100% (QA)

A At the time of the lease agreement the leased asset will be recorded in the books of the lessee at ... View the full answer