D H min 4 QUESTION DATA: You, the Controller at Bob's Electronics Ltd, just completed a review of a new non-cancellable lease agreement with Tropical Leasing Corp. After applying the appropriate lease classification criteria, you correctly concluded the lease to be treated as a capital lease in accordance with ASPE. During your analysis, you obtained the following facts: 3 Lease term commencing October 1, 2020 5 years 5 Economic life of leased equipment 8 years 6 Fair value of leased equipment at October 1, 2020 $70,000 7 Unguaranteed residual value at end of lease term $7,034 8 The asset will revert to Tropical Leasing Corp. at the end of the lease term. Bob's Electronics Ltd, uses the straight-line depreciation method for all equipment 10 You prepared the following correct amortization schedule for the first three lease payments: 9 11 Payment Interest Principal Date 12 13 Oct. 1/20 14 Oct. 1/20 15 Oct. 1/21 16 Oct. 1/22 17 Pi P2 P3 14,500 14,500 14,500 Carrying value S 64,744 50,244 38,759 26,585 14,500 11,485 12.174 3,015 2,326 ning correct amortization schedule for the first three lease payments: 11 H P3 WORKSP Date 12 Payment Interest Principal Carrying 13 Oct. 1/20 value 14 Oct. 1/20 $ 64,744 P1 14,500 15 Oct. 1/21 14,500 50,244 P2 14,500 3,015 11,485 38,759 16 Oct. 1/22 14,500 2,326 12,174 26,58S 17 REQUIRED: You are preparing the financial statement presentation for Bob's Electronics Ltd. year-end of December 31. Answer the following questions with respect to this lease agreement. 18 19 (1) What accounts and amounts will appear on Bob's income statement for the year ending December 31, 2020? Use the drop-down boxes to select the appropriate account name. Round all final amounts to the nearest whole dollar using the 0 ROUND formula, 1 Account name Amount $ *ROUND to O decimals H (2). What accounts and amounts will appear on Bob's balance sheet as at December 31, 2020? Use the drop-down boxes to select the appropriate account name under the classification provided. Round all amounts to the nearest whole dollar using the ROUND formula 26 27 Classification Account Name Amount ($) 28 Non-current assets 29 30 31 32 "ROUND to O decimals Current liabilities Non-current liabilities 33 (3) What accounts and amounts will appear on Bob's income statement for the year ending December 31, 2021? Use the drop-down boxes to select the appropriate account name. Round all final amounts to the nearest whole dollar using the 35 ROUND formula 36 37 Account name Amount $ 38 ROUND to O decimals 39 40 H (4). What accounts and amounts will appear on Bob's balance sheet as at December 31, 2021? Use the drop-down boxes to select the appropriate account name under the classification provided. Round all amounts to the nearest whole dollar using the ROUND formula 41 42 43 Classification Account Name Amount ($) Non-current assets 44 45 46 ROUND to O decimals Current liabilities 47 Non-current liabilities 48
