Question
David starts a finance lease on 1 January 2014 acquiring an asset which has a fairvalue of $8,500. Seven annual installments of $1,000 are payable
David starts a finance lease on 1 January 2014 acquiring an asset which has a fairvalue of $8,500. Seven annual installments of $1,000 are payable in arrears. The implicitinterest rate in the lease is 11%.
REQUIRED:Show how the finance lease would be treated in the Income Statement for the year ended31 December 2014 and Statement of Financial Position as at that date.
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Financial Accounting Fundamentals
Authors: John J. Wild
5th edition
1308500102, 1308500106, 78025753, 978-0078025754
