Please help with this, its MCQ no need explanation

1) AAA Limited is a finance company. It purchased a specialist machine for $70,000 and incurred additional costs of $2,119 for installation on 1 January 20X1. The machine was leased to BBB Limited under a three year lease with three annual fixed lease payments of $26,364 payable annually at the start of each financial year beginning on 1 January 20X1. What is the interest rate implicit in the lease (rounded to the nearest number)?

1. 11%
2. 9%
3. 10%
4. 12%

2) Under FRS 116 Leases, which of the following conditions would generally lead to a lease being classified as a finance lease by a lessor? Condition (i) is where ownership is transferred by the end of the lease term. Condition (ii) is where the lease contains a bargain purchase option. Condition (iii) is where the lease term is for the major part of the economic life of the asset. Condition (iv) is where the present value of the lease payments are substantially equal to the asset's fair value.

1. All four conditions must exist.
2. Conditions (i), (ii) and (iii) only.
3. Any of the four conditions.
4. Conditions (i) and (ii) only.

3) Which of the following statements with respect to FRS 116 Leases is FALSE?

1. None of the listed options.
2. A lessor shall disclose the nature of its leasing activities.
3. A lessor shall disclose why there is any significant changes in the carrying amount of the net investment in the lease.
4. A lessor shall disclose how it manages its risk associated with any rights it retains in the underlying asset.

4) Contract A does not contain a bargain purchase option but the lease term is for the major part of the economic life of the leased asset. Contract B does not transfer title to the lessee at the end of the lease term but the present value of the lease payments is equal to the fair value of the leased asset. Which of the following statements is FALSE under FRS 116 Leases?

1. Lessee determines whether a lease arrangement or a service arrangement exists in the contract.
2. Lessor in contract A classifies it as a finance lease while lessor in contract B classifies it as a finance lease.
3. Lessee in contract A classifies it as a finance lease while lessee in contract B classifies it as a finance lease.
4. Lessor determines whether a lease arrangement or a service arrangement exists in the contract.

5) AAA Limited, with 31 December financial year-ends, leases out a machine on 1 January 20X1 on a finance lease. The machine has a fair value of $50,000. The annual fixed lease payments of $19,753 will be receivable on 31 December 20X1, 31 December 20X2, and 31 December 20X3. The implicit rate of interest is 9%. Using the effective interest method, what is the amount of interest income (rounded to the nearest dollar) earned by AAA Limited in the year ending 31 December 20X2?

1. $4,500
2. $1,777
3. $3,127
4. None of the listed options

6) AAA Limited is in the business of manufacturing and selling computer systems. It leased computers to BBB Limited on 1 January 20X1. The manufacturing cost of the computers was $12 million. This non-cancellable lease had the following terms: (i) Lease payments: $2,466,754 semi-annually; first payment at 1 January 20X1; remaining payments at July 1 and Jan 1 each year through 1 July 20X5; (ii) Lease term: 5 years (10 semi-annual payments); (iii) No residual value; (iv) no bargain purchase option; (v) Economic life of equipment: 5 years; (vi) Implicit interest rate of 5% semi-annually; (vii) Fair value of the computers at 1 January 20X1: $20 million. Which of the following statements is FALSE, assuming AAA Limited adopts FRS 116 Leases?

1. None of the listed options.
2. AAA Limited records sales revenue of $20 million in year ending 31 December 20X1.
3. AAA Limited records cost of goods sold of $12 million in year ending 31 December 20X1.
4. AAA Limited records interest expense in the year ending 31 December 20X1.

7) Contract A does not contain a bargain purchase option but the lease term is for the major part of the economic life of the leased asset. Contract B does not transfer title to the lessee at the end of the lease term but the present value of the lease payments is equal to the fair value of the leased asset. How should these leases be classified by the lessor under FRS 116?

1. Lessor in contract A classifies it as an operating lease while lessor in contract B classifies it as a finance lease.
2. Lessor in contract A classifies it as a finance lease while lessor in contract B classifies it as a finance lease.
3. Lessor in contract A classifies it as a finance lease while lessor in contract B classifies it as an operating lease.
4. Lessor in contract A classifies it as an operating lease while lessor in contract B classifies it as an operating lease.

8) Which of the following is not part of the lease payments taken into account by the lessor under FRS 116 Leases?

1. any amounts guaranteed by the lessee or by a party related to the lessee or by an unrelated third party
2. the payments over the lease term that the lessee is required to make
3. Any payment the lessee must make at the end of the lease term to exercise the bargain purchase option to purchase the leased asset.
4. None of the listed options.

9) AAA Limited is in the business of manufacturing and selling computer systems. It leased computers to BBB Limited on 1 January 20X1. The manufacturing cost of the computers was $12 million. This non-cancellable lease had the following terms: (i) Lease payments: $2,466,754 semi-annually; first payment at 1 January 20X1; remaining payments at July 1 and Jan 1 each year through 1 July 20X5; (ii) Lease term: 5 years (10 semi-annual payments); (iii) No residual value; (iv) no bargain purchase option; (v) Economic life of equipment: 5 years; (vi) Implicit interest rate of 5% semi-annually; (vii) Fair value of the computers at 1 January 20X1: $20 million. Which of the following statements is FALSE, assuming AAA Limited adopts FRS 116 Leases?

1. AAA Limited records interest income in the year ending 31 December 20X1.
2. AAA Limited records sales revenue of $20 million in year ending 31 December 20X1.
3. AAA Limited records cost of goods sold of $12 million in year ending 31 December 20X1.
4. None of the listed options.

10) Under FRS 116 Leases, which of the following characteristics would not apply to a finance lease?

1. The lease term is for the major part of the economic life of the asset.
2. The leased assets are specialised in nature such that only the lessee can use them without major modification.
3. Ownership of the asset is transferred to the lessee at the end of the lease term.
4. At the inception of the lease, the present value of the lease payments amounts to 10% of the fair value of the leased asset.