Green Pea Organics (lessee) entered a lease agreement for a tractor, and prepared a lease schedule to enable them to produce their financial statements.

Unfortunately someone deleted the electronic version of the schedule and the printed schedule was damaged and some figures are now illegible.

The implicit rate = 7%

Prepare the general journal entries that would have been required for the first year of the lease, the year ended 30 June 2018, assuming Green Pea Organics will return the tractor at the end of the lease.

 

Opening Balance Payment Interest Principal Closing Balance 01/07/2017 94,089.20 9,408.92 9,408.92 84,680.28 30/06/2018 84,680.28 25,000.00 5,927.62 19,072.38 65,607.90 30/06/2019 65,607.90 25,000.00 4,592.55 20,407.45 45,200.45 30/06/2020 45,200.46 25,000.00 3,164.03 21,835.97 21,364.49 30/06/2021 23,364.49 25,000.00 1,635.51 21,364.49