BC Co. (BCC), a December 31 year-end public company, leases specialized optical

equipment to clinics across Canada. NS Co. (NSC), also a December 31 year end company has asked for lease terms of highly technical eye scanner equipment.

BCC sent NSC a quote that proposed quarterly payments of $9,177 at the beginning of each quarter.

The following data is provided as a basis for BCC's quote:

1. Lease term: 3 years; quarterly payments starting at lease anniversary date
2. Estimated useful economic life: 5 years

3. Lease start date: August 1, 2020

4.The lease contained a bargain purchase option of $10,000 at the completion of the

lease agreement.

5.Annual rate of return priced into the lease: 6%

6. The quarterly lease payments include an amount of $900 pertaining to a

maintenance agreement for the equipment which was very attractive to NSC. BCC

records any executory costs received from multiple customers to a maintenance

expense recovery (credit) account.

7. NSC depreciates assets on a straight line basis and is a normal credit risk to BCC

NSC accepts the lease quote and terms of the lease agreement.

Round all calculation so the nearest $; no cents

Required #1:

Prepare the lease entries for NSC at the lease payment dates for the year and at December

31, 2020.

Required #2

Prepare, in good form, an excerpted Statement of Financial Position for Nova Scotia

Company at December 31, 2020, its financial year end.

Nova Scotia Company

Statement of Financial Position (partial)

As at December 31, 2020