Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pearl Inc. entered into a five-year lease of equipment from Matusek Inc on July 1, 2021. The equipment has an estimated economic life of eight
Pearl Inc. entered into a five-year lease of equipment from Matusek Inc on July 1, 2021. The equipment has an estimated economic life of eight years and fair value of $310,000. The present value of the lease payments amounts to $267,351. The lease does not have a bargain purchase option and ownership does not transfer to Pearl at the end of the lease. Using the above WileyPlus question please enter the appropriate information from the question into the appropriate boxes below: Data from the WileyPlus Assignment Question #3 Date of the lease July 1, 2021 All items in the parts below MUST be cell-referenced to your data to the left. Use 310,000.00 Excel formulas for all amounts including dates. Fair value of equipment $ Present value of lease payments $ 267,351.00 Term of the lease (in years) 5 Interest rate (not provided) 8.00% c. Prepare all the journal entries to record the lease obligation and first payment on July 1, 2021 (4 marks) using IFRS rules. Date Account Name Debit Credit July 1, 2021 July 1, 2021 d. Prepare the required journal entries at June 30, 2022 (the company's year end) and the July 1, 2022 lease payment using IFRS rules. (Assume straightline depreciation on the equipment under lease) (7 marks) Date Account Name Debit Credit July 1, 2021 July 1, 2022
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