Question
On December 31, 2019 A company leases trailers to B Company under a five-years The ownership pass to company A at the end of the
On December 31, 2019 A company leases trailers to B Company under a five-years
The ownership pass to company A at the end of the lease.
The undiscouned minimum lease payment = 64.1 million
interest rate = 3.28% (present value factor for 5 periods at 3.28% is 4.717).
Residual value= 0
Estimated useful life= 6
Depreciation methods = straight-line method
Requirements:
1-Calculate the annual lease amortization schedule (for company A and B)
2- Write entries relating to the lease agreement for the first two years of the lease (for company A and B)
3- Write section relating to the lease transactions (in the balance sheet) at the end of the second year (for company A and B)
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