Question
On january 1, 20x1, lessor leases out a machinery to lessee under a 3 year lease. Annual rent of 50,000 is payable at the end
On january 1, 20x1, lessor leases out a machinery to lessee under a 3 year lease. Annual rent of 50,000 is payable at the end of each year. The implicit interest rate, known to lessee, is 12%. The machinery has a remaining useful life of 4 years and historical cost of 400,000 and an accumulated depreciation of 279,908 in the books of lessor.
- What is the entry in the books of lessee to initially recognize the lease
- What is the entry in the books of lessor to initially recognize the lease
- What is the entry in the books of lessee to recognize the first rental payment
- What is the entry in the books of lessor to recognize the first rental collection
- What is the entry in the books of lessee to recognize the depreciation on the leased asset after the end of the first year of the lease
- Assume the lease is an operating lease, what is the entry in the books of lessee to recognize the first rental payment
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Fundamental Accounting Principles Volume II
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
16th Canadian edition
1259261433, 978-1260305838
