Question
On January 1, 2021, Sunland Ltd., which uses IFRS 16, entered into an eight-year lease agreement for a conveyor machine. Annual lease payments are $33,600
On January 1, 2021, Sunland Ltd., which uses IFRS 16, entered into an eight-year lease agreement for a conveyor machine. Annual lease payments are $33,600 at the beginning of each lease year, which ends December 31, and Sunland made the first payment on January 1, 2021. At the end of the lease, the machine will revert to the lessor. However, conveyor machines are expected to last for only eight years and have no residual value. At the time of the lease agreement, conveyor machines could be purchased for $193,000 cash. Equivalent financing for the machine could have been obtained from Sunlands bank at 11%. Sunlands fiscal year coincides with the calendar year. Sunland uses straight-line depreciation for its conveyor machines. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.
Prepare the journal entries on Sunland Ltd.s books to (1) reflect the signing of the lease agreement, (2) record the payments and expenses related to this lease for the years 2021 and 2022, and (3) make any adjusting journal entries at its fiscal year ends of December 31, 2021 and 2022. Sunland does not use reversing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)
Date | Account Titles and Explanation | Debit | Credit |
1/1/2112/31/211/1/2212/31/22 | |||
| |||
| |||
(To record inception and payment of lease.) | |||
1/1/2112/31/211/1/2212/31/22 | |||
| |||
(To record depreciation expense.) | |||
1/1/2112/31/211/1/2212/31/22 | |||
| |||
(To record interest.) | |||
1/1/2112/31/211/1/2212/31/22 | |||
| |||
(To record lease payment.) | |||
1/1/2112/31/211/1/2212/31/22 | |||
| |||
(To record depreciation expense.) | |||
1/1/2112/31/211/1/2212/31/22 | |||
| |||
(To record interest.) |
Save for Later
Attempts: 0 of 2 used
Submit Answer
(e)
Prepare a partial comparative statement of financial position at December 31, 2022, and 2021, for all of the accounts related to this lease for Sunland Ltd. Be specific about the classifications that should be used.
Sunland Ltd. Statement of Financial Position (partial) December 31For the Month Ended December 31For the Year Ended December 31 | |||||
2022 | 2021 | ||||
Total Shareholders' EquityTotal Liabilities and Shareholders' EquityTotal Property, Plant and EquipmentTotal Current AssetsShort-Term InvestmentsCurrent AssetsNon-Current AssetsShareholders' EquityCurrent LiabilitiesTotal Current LiabilitiesNon-Current LiabilitiesIntangible AssetsTotal Intangible AssetsTotal AssetsLong-Term InvestmentsShort-Term LiabilitiesProperty, Plant and Equipment | |||||
Shareholders' EquityIntangible AssetsNon-Current LiabilitiesCurrent LiabilitiesTotal Property, Plant and EquipmentTotal AssetsTotal Intangible AssetsProperty, Plant and EquipmentShort-Term InvestmentsCurrent AssetsTotal Current LiabilitiesTotal Shareholders' EquityTotal Current AssetsLong-Term InvestmentsTotal Liabilities and Shareholders' EquityNon-Current AssetsShort-Term Liabilities | |||||
$ | $ | ||||
AddLess: | |||||
Intangible AssetsTotal Intangible AssetsTotal Shareholders' EquityShareholders' EquityTotal Current LiabilitiesTotal Current AssetsCurrent AssetsNon-Current LiabilitiesShort-Term LiabilitiesNon-Current AssetsLong-Term InvestmentsTotal Liabilities and Shareholders' EquityTotal Property, Plant and EquipmentProperty, Plant and EquipmentTotal AssetsCurrent LiabilitiesShort-Term Investments | |||||
Current AssetsShort-Term InvestmentsCurrent LiabilitiesTotal AssetsNon-Current LiabilitiesShareholders' EquityIntangible AssetsTotal Property, Plant and EquipmentTotal Liabilities and Shareholders' EquityShort-Term LiabilitiesProperty, Plant and EquipmentTotal Current AssetsTotal Shareholders' EquityTotal Intangible AssetsTotal Current LiabilitiesLong-Term InvestmentsNon-Current Assets | |||||
Save for Later
Last saved 19 seconds ago.
Saved work will be auto-submitted on the due date.
Attempts: 0 of 2 used
Submit Answer
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started