Yesilkoy Corporation has leased a special purpose machine required for its activities from Ataky Leasing Inc. with

Yesilkoy Corporation has leased a special purpose machine required for its activities from Ataköy Leasing Inc. with the following conditions as of 1.1.2020.

a) The estimated economic life of the machine is 10 years.

b) According to the agreement, the lease period is 4 years starting from 1.1.2020 and cannot be canceled.

c) The annual rent amount is 6,000,000 liras.

d) Rent payments will be made at the beginning of each year. The first lease will be paid on 1.1.2020.

e) Yeşilköy A.Ş. will be able to buy the machine at the end of the 4th year by giving 800,000 liras.

If Yeşilköy A.Ş. was to buy the machine in question instead of renting it, it would be able to provide the necessary loan with 12% interest.

Requested: 

Demonstrate the accounting records that the business must make on 1.1.2020 and 31.12.2021 and their impact on financial statements according to IFRS and tax legislation.

Answer rating: 100% (QA)

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