om messenger_media/?thread_id=100001850204963&attachment DET 13 Question 16 (5 points) On 1 July 2020, Sandy Ltd enters into a non-cancellable five-year lease agreement with Bill Ltd. The lease is for an item of machinery. The machinery is expected to have an economic life of six years, after which time it will have no residual value. There is a bargain purchase option, which Sandy Ltd will be able to exercise at the end of the fifth year, for $80 000. There are to be five annual payments of $100 000, the first being made on 30 June 2021. Included within the $100 000 lease payments is an amount of $10 000 representing payment to the lessor for the insurance and maintenance of the machinery. The machinery is to be depreciated on a straight-line basis. The rate of interest implicit in the lease is 12 per cent. Additional Information: Present value of an annuity in arrears of $1 for five years at 12 per cent - 3.6048 Present value of $1 in five years at 12 per cent - 0.5674 Required Part B - AASB 16 Leases came into effect on 1 January 2019. It replaces the old Standard AASB 117 Leases. Explain the differences between AASB 117 and AASB 16, and the benefits of the new Standard (Explain in your own words). nything O * Acer . 0 O 111 11 90 + A 3 4 7 5 & 7 6 8 8 9 om messenger_media/?thread_id=100001850204963&attachment DET 13 Question 16 (5 points) On 1 July 2020, Sandy Ltd enters into a non-cancellable five-year lease agreement with Bill Ltd. The lease is for an item of machinery. The machinery is expected to have an economic life of six years, after which time it will have no residual value. There is a bargain purchase option, which Sandy Ltd will be able to exercise at the end of the fifth year, for $80 000. There are to be five annual payments of $100 000, the first being made on 30 June 2021. Included within the $100 000 lease payments is an amount of $10 000 representing payment to the lessor for the insurance and maintenance of the machinery. The machinery is to be depreciated on a straight-line basis. The rate of interest implicit in the lease is 12 per cent. Additional Information: Present value of an annuity in arrears of $1 for five years at 12 per cent - 3.6048 Present value of $1 in five years at 12 per cent - 0.5674 Required Part B - AASB 16 Leases came into effect on 1 January 2019. It replaces the old Standard AASB 117 Leases. Explain the differences between AASB 117 and AASB 16, and the benefits of the new Standard (Explain in your own words). nything O * Acer . 0 O 111 11 90 + A 3 4 7 5 & 7 6 8 8 9