PLEASE ANSWER NO. 13 ONLY

PART C: Leases Platin, Bhd leases the following assets from three lessors. The assets are to be used in the property development of the company. The details of the assets are as follows: Lessor Colton Bhd Marisha Bhd Tinker Bhd Type of asset Excavator Truck Crane Yearly rental RM15,000 (first RM12.000 (first RM10,000 (first payment on 31 payment on 28 payment on 30 June December 2020) February 2021) 2020) Inception date 1 January 2020 1 March 2020 1 July 2019 Lease term 10 years 7 years 5 years Estimated economic 20 years years 10 years 9 life Purchase option None None RM75,000 at end of year 10. None RM220,000 None None RM55.000 RM150,000 -0- RM15,000 RM10.000 Renewal option Fair value at the inception of lease Guaranteed residual value Estimated residual value at end of lease term Implicit rate RM90,000 RM11,000 RM10.000 5% 4% 4% CASE INSTRUCTIONS: (11) Prepare journal entries for Platino Bhd at the inception date of each lease. (12) For each of the assets, provide an analysis to determine the type of lease for lessor using the following schedule. Transfer of title? Yes/No Contain purchase option? Economic life test PV of lease payment equals at least substantially all of FV of the leased asset? Type of lease (13) M. Faizal, who just graduated in accounting, is auditing the company's financial statements for the year ended 31 December 2020. He noticed that on 1 January 2020. the company entered into a leasing contract with Cloud Bhd to lease a photocopy machine. The terms of the contract are as follows: i. The non-cancellable lease term of 5 years. Lease rental of RM3,500 per year (paid on every 31 December) and commencing on 31 Dec 2020 Plating Bhd guarantees the residual value of RM2,500. The estimated economic life of the asset is 5 years. The implicit rate and Plating Bhd is incremental borrowing rate is 6% per year. ii. 111. iv. V. In the company's accounting record, only the following journal entries for the photocopy machine are prepared for FYE 2010: Dr. Leased asset 16,611 Cr. Lease liability 16,611 Mr. Faizal asked Miss Mia, an account clerk, the reasons the company prepared such journal entries. Miss Mia explained that the transaction should be recognized as a finance lease based on MFRS117 Leases. REQUIRED: (Round the answer to the whole RM) (a) Discuss whether the leasing transaction for the photocopy machine is appropriately recorded by Platin, Bhd. (CTPS 2) (6) Explain whether there is any implication to Platino Bhd when the company records the leasing transaction in accordance with MFRS 117. (CTPS 3) (c) Discuss how Platine Bhd should account for the leasing transaction for the year 2020 (CTPS 4). Show the relevant calculations and journal entries, where appropriate. (CTPS 5)