Pear Tree Limited is neither a dealer nor a manufacturer. Pear Tree Limited entered into an...
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Pear Tree Limited is neither a dealer nor a manufacturer. Pear Tree Limited entered into an agreement in which Pear Tree leased a machine to Giant Limited (cost Rs 210,000). The lease is a finance lease, the terms of which are as follows: 1) inception of lease: 1 January 20X1 2) lease period: 3 years 3) lease installments: Rs 80,000, annually in advance, payable on 1 January of each year 4) guaranteed residual value: Rs 10,000, payable on 31 December 20X3; 5) Interest rate implicit in the agreement: 18.7927%. Required: a) Prepare the journal entries for each of the years ended 31 December 2001 to 2003 in Pear Tree Limited's books (the books of the lessor). b) Prepare extracts from statement of financial position as on 31 December 2001 to 2003. Pear Tree Limited is neither a dealer nor a manufacturer. Pear Tree Limited entered into an agreement in which Pear Tree leased a machine to Giant Limited (cost Rs 210,000). The lease is a finance lease, the terms of which are as follows: 1) inception of lease: 1 January 20X1 2) lease period: 3 years 3) lease installments: Rs 80,000, annually in advance, payable on 1 January of each year 4) guaranteed residual value: Rs 10,000, payable on 31 December 20X3; 5) Interest rate implicit in the agreement: 18.7927%. Required: a) Prepare the journal entries for each of the years ended 31 December 2001 to 2003 in Pear Tree Limited's books (the books of the lessor). b) Prepare extracts from statement of financial position as on 31 December 2001 to 2003.
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Answer rating: 100% (QA)
Answer a Year 1 1 January 20X1 Leased asset machine Rs 210000 Cash Rs 80000 Being the first lease in... View the full answer
Related Book For
Calculus Early Transcendentals
ISBN: 978-0321947345
2nd edition
Authors: William L. Briggs, Lyle Cochran, Bernard Gillett
Posted Date:
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