On January 1 2022, MNO Corporation Ltd, the lessor, entered into a non-cancellable lease agreement for...
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On January 1 2022, MNO Corporation Ltd, the lessor, entered into a non-cancellable lease agreement for computer system with PQR Corporation Ltd, the lessee, the following information related to the lease: Annual lease payment due at the beginning of each year, beginning on 1 January 2022 Lease term Economic useful life of computer system Lessor's manufacturing cost Fair value of computer system Estimated unguaranteed residue value of lease equipment at the end of lease term Lessor's implicit rate $62,217 4 years 6 years $200,000 2. $227,520 $30,000 13% Required 1. For lessor, is this a finance lease or operating lease? Why? If it's a finance lease, prepare an amortization schedule that would be suitable for MNO Corporation as lessor for the lease term (5 marks) Prepare all journal entries that MNO Corporation should make from 1 Jan 2022 to 31 December 2022 (8 marks) Round your answer to nearest dollar. On January 1 2022, MNO Corporation Ltd, the lessor, entered into a non-cancellable lease agreement for computer system with PQR Corporation Ltd, the lessee, the following information related to the lease: Annual lease payment due at the beginning of each year, beginning on 1 January 2022 Lease term Economic useful life of computer system Lessor's manufacturing cost Fair value of computer system Estimated unguaranteed residue value of lease equipment at the end of lease term Lessor's implicit rate $62,217 4 years 6 years $200,000 2. $227,520 $30,000 13% Required 1. For lessor, is this a finance lease or operating lease? Why? If it's a finance lease, prepare an amortization schedule that would be suitable for MNO Corporation as lessor for the lease term (5 marks) Prepare all journal entries that MNO Corporation should make from 1 Jan 2022 to 31 December 2022 (8 marks) Round your answer to nearest dollar.
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Accounting What the Numbers Mean
ISBN: 978-0073527062
9th Edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
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