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Gormenghast Ltd has decided to buy back 10% of their ordinary shares for $5 each. At the date of the buyback, their equity consists of the following: Ordinary share capital (1 000 000 shares, fully paid) $ 5 000 000. General reserve 400 000. Retained earnings 300 000. The buyback will also incur costs of $50 000. The entire buyback is to be funded by taking equal amounts from the general reserve and the retained earnings accounts. What is the correct journal entry to record the buyback? Dr Ordinary share capital 500 000 Cr Cash 500 000 Dr General reserve 250 000 Dr Share buyback 250 000 Cr Cash 500 000 Dr General reserve 275 000 Dr Share buyback 275 000 Cr Cash 550 000 Dr Ordinary share capital 550 000 Cr Cash 550 000

28Commander Ltd leased a ship to Shepard Ltd. The ship was leased for a term of 5 years. On the day before the lease commencing, Commander Ltd had bought the ship for $15 000 000. The legal fees incurred by Commander Ltd to draw up the lease agreement amounted to $1 000 000. Assuming that the lease is a finance lease, what is the amount of the lease receivable that Commander Ltd should recognise at the start of the lease? $16 000 000 $15 100 000 $14 000 000 $15 000 000