Question 1 On January 1, 2020, Bramble Ltd. entered into an agreement to lease a truck from Grouper Ltd. Both Bramble and Grouper use IFRS 16. The details of the agreement are as follows: Carrying value of truck for Grouper Ltd. $20,832 Fair value of truck $20,832 Economic life of truck 5 years Lease term 3 years Rental payments (at beginning of each month) $625 Executory costs included in rental payments each month for insurance $22 Incremental borrowing rate for Bramble Ltd. 12% Bramble Ltd. expects to pay Grouper Ltd. $3,570 under a residual value guarantee for the truck. Additional information: 1. There are no abnormal risks associated with the collection of lease payments from Bramble. 2. There are no additional unreimbursable costs to be incurred by Grouper in connection with the leased truck. 3. At the end of the lease term, Grouper sold the truck to a third party for $3,280, which was the truck's fair value at December 31, 2022. Bramble paid Grouper the difference between the residual value guarantee of $3,570 and the proceeds obtained on the resale. 4. Bramble knows the interest rate that is implicit in the lease. 5. Bramble knows the amount of executory costs included in the minimum lease payments. 6. Bramble uses straight-line depreciation for its trucks with the residual value guarantee of $3,570 for the leased truck. Prepare a fease amortization schedule for the full term of the lease. (Round answers to decimal places, c.c. 5,275.) Lease Amortization Schedule Monthly Lease Interest Reduction Balance Payment on Unpaid of Lease Lease Date Plus GRY Liability Liability Liability Jan 1, 2017 Feb 1, 2017 Mar. 1. 2017 Apr. 1. 2017 May 1, 2017 June 1, 2017 July 1, 2017 Aug. 1, 2017 Sept. 1. 2017 Oct. 1. 2017 Nov. 1, 2017 Dec. 1, 2017 Jan 1, 2018 Feb. 1. 2018 Mar. 1, 2018 Apr 1, 2018 May 1, 2018 June 1, 2018 July 1, 2018 Aug. 1. 2018 Sept. 1. 2018 Oct. 1. 2018 Nov. 1. 2018 Dec. 1. 2018 Nov. 1, 2017 Dec. 1, 2017 Jan 1, 2018 Feb. 1. 2018 Mar. 1, 2018 Apr 1, 2018 May 1, 2018 June 1, 2018 July 1, 2018 Aug. 1. 2018 Sept. 1. 2018 Oct. 1. 2018 Nov. 1. 2018 Dec. 1. 2018 Jan 1, 2019 Feb 1, 2019 Mar 1, 2019 Apr 1, 2019 May 1, 2019 June 1, 2019 July 1, 2019 Aug 1, 2019 Sept. 1, 2019 Oct 1, 2019 Nov. 1, 2019 Dec. 1, 2019 Dec 31, 2019 Prepare the journal entries that Oriole would make on January 1, 2017 and 2015, and any year-end adjusting journal entries at December 31, 2017, related to the lease arrangement, assuming that Oriole does not use reversing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Il no entry is required, select "No Entry for the account titles and enter for the amounts. Round answers to decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan 1, 2017 (To record inception, insurance & lease payment) Dec 31, 2017 (To record accrued interest Dec 31, 2017 (To record depreciation) Jan. 1. 2018 Identify all accounts that will be reported by Oriole Ltd. on its comparative statement of financial position at December 31, 2018 and 2017, and comparative Income statement for the fiscal years ending December 31, 2018 and 2017. Include all the necessary note disclosures on the transactions related to this lease for Orole and be specific about the dassifications in each statement. (Round answers to decimal places, e.g. 5,275, Enter negative amounts using either a negative sion preceding the number e.g. -45 or parentheses e.o. (45).) Oriole Ltd. Statement of Financial Position 2018 2017 Note Disclosures 2018 2017 Amounts due in 2018 Amounts due in 2019 Amount representing executory costs Amount representing interest Balance of obligation Oriole Ltd. Income Statement 2018 2017 Prepare the Journal entry for Oriole's payment on December 31, 2019, to Novak to settle the quaranteed residual value deficiency. Assume that no accruals for interest have been recorded as vet during 2019, but that the 2019 depreciation expense for the truck has been recorded. (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 for the amounts. Round answers to decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec 31, 2019 Prepare Oriole's partial comparative statement of cash flows using the indirect method for the years ended December 31, 2018 and 2017, for all transactions related to the above information. Be specific about the dassifications in the financial statement. Oriole has opted to show interest paid as operating activities. (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis e.o. (15,000).) Oriole Led. Statement of Cash Flows - Partial 2018 2017 List of Accounts CL Question 1 Accounts Payable Accounts Receivable Accumulated Depreciation - Leased Buildings Accumulated Depreciation - Buildings Accumulated Depreciation - Leased Equipment Accumulated Depreciation - Rental Equipment Accumulated Depreciation - Right-of-Use Asset Accumulated Depreciation - Software under Lease Accumulated Depreciation - Vehicles Accumulated Depreciation - Vehicles under Lease Amortization Expense Buildings Buildings under Lease Cash Cost of Goods Sold Deferred Profit on Sale-Leaseback Depreciation Expense Equipment Equipment Acquired for Lessee Equipment under Lease Insurance Expense Insurance Payable Insurance Revenue Interest Expense Interest Income Interest Payable Interest Receivable Inventory Land Rental Expense Land under Lease Lease Liability Lease Receivable Legal Expense Loss on Lease Low Value Lease Expense No Entry Obligations under Lease Operating Expenses Prepaid Expenses Prepaid Insurance Prepaid Rent Property Tax Expense Rent Expense Rental Equipment Rent Payable Rent Payable Rent Receivable Rent Revenue Repairs and Maintenance Expense Right-of-Use Asset Sales Revenue Selling Expenses Short-Term Lease Expense Software under Lease Unearned Interest Income Unearned Rent Revenue Vehicles Vehicles under Lease Question 1 On January 1, 2020, Bramble Ltd. entered into an agreement to lease a truck from Grouper Ltd. Both Bramble and Grouper use IFRS 16. The details of the agreement are as follows: Carrying value of truck for Grouper Ltd. $20,832 Fair value of truck $20,832 Economic life of truck 5 years Lease term 3 years Rental payments (at beginning of each month) $625 Executory costs included in rental payments each month for insurance $22 Incremental borrowing rate for Bramble Ltd. 12% Bramble Ltd. expects to pay Grouper Ltd. $3,570 under a residual value guarantee for the truck. Additional information: 1. There are no abnormal risks associated with the collection of lease payments from Bramble. 2. There are no additional unreimbursable costs to be incurred by Grouper in connection with the leased truck. 3. At the end of the lease term, Grouper sold the truck to a third party for $3,280, which was the truck's fair value at December 31, 2022. Bramble paid Grouper the difference between the residual value guarantee of $3,570 and the proceeds obtained on the resale. 4. Bramble knows the interest rate that is implicit in the lease. 5. Bramble knows the amount of executory costs included in the minimum lease payments. 6. Bramble uses straight-line depreciation for its trucks with the residual value guarantee of $3,570 for the leased truck. Prepare a fease amortization schedule for the full term of the lease. (Round answers to decimal places, c.c. 5,275.) Lease Amortization Schedule Monthly Lease Interest Reduction Balance Payment on Unpaid of Lease Lease Date Plus GRY Liability Liability Liability Jan 1, 2017 Feb 1, 2017 Mar. 1. 2017 Apr. 1. 2017 May 1, 2017 June 1, 2017 July 1, 2017 Aug. 1, 2017 Sept. 1. 2017 Oct. 1. 2017 Nov. 1, 2017 Dec. 1, 2017 Jan 1, 2018 Feb. 1. 2018 Mar. 1, 2018 Apr 1, 2018 May 1, 2018 June 1, 2018 July 1, 2018 Aug. 1. 2018 Sept. 1. 2018 Oct. 1. 2018 Nov. 1. 2018 Dec. 1. 2018 Nov. 1, 2017 Dec. 1, 2017 Jan 1, 2018 Feb. 1. 2018 Mar. 1, 2018 Apr 1, 2018 May 1, 2018 June 1, 2018 July 1, 2018 Aug. 1. 2018 Sept. 1. 2018 Oct. 1. 2018 Nov. 1. 2018 Dec. 1. 2018 Jan 1, 2019 Feb 1, 2019 Mar 1, 2019 Apr 1, 2019 May 1, 2019 June 1, 2019 July 1, 2019 Aug 1, 2019 Sept. 1, 2019 Oct 1, 2019 Nov. 1, 2019 Dec. 1, 2019 Dec 31, 2019 Prepare the journal entries that Oriole would make on January 1, 2017 and 2015, and any year-end adjusting journal entries at December 31, 2017, related to the lease arrangement, assuming that Oriole does not use reversing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Il no entry is required, select "No Entry for the account titles and enter for the amounts. Round answers to decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan 1, 2017 (To record inception, insurance & lease payment) Dec 31, 2017 (To record accrued interest Dec 31, 2017 (To record depreciation) Jan. 1. 2018 Identify all accounts that will be reported by Oriole Ltd. on its comparative statement of financial position at December 31, 2018 and 2017, and comparative Income statement for the fiscal years ending December 31, 2018 and 2017. Include all the necessary note disclosures on the transactions related to this lease for Orole and be specific about the dassifications in each statement. (Round answers to decimal places, e.g. 5,275, Enter negative amounts using either a negative sion preceding the number e.g. -45 or parentheses e.o. (45).) Oriole Ltd. Statement of Financial Position 2018 2017 Note Disclosures 2018 2017 Amounts due in 2018 Amounts due in 2019 Amount representing executory costs Amount representing interest Balance of obligation Oriole Ltd. Income Statement 2018 2017 Prepare the Journal entry for Oriole's payment on December 31, 2019, to Novak to settle the quaranteed residual value deficiency. Assume that no accruals for interest have been recorded as vet during 2019, but that the 2019 depreciation expense for the truck has been recorded. (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 for the amounts. Round answers to decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec 31, 2019 Prepare Oriole's partial comparative statement of cash flows using the indirect method for the years ended December 31, 2018 and 2017, for all transactions related to the above information. Be specific about the dassifications in the financial statement. Oriole has opted to show interest paid as operating activities. (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis e.o. (15,000).) Oriole Led. Statement of Cash Flows - Partial 2018 2017 List of Accounts CL Question 1 Accounts Payable Accounts Receivable Accumulated Depreciation - Leased Buildings Accumulated Depreciation - Buildings Accumulated Depreciation - Leased Equipment Accumulated Depreciation - Rental Equipment Accumulated Depreciation - Right-of-Use Asset Accumulated Depreciation - Software under Lease Accumulated Depreciation - Vehicles Accumulated Depreciation - Vehicles under Lease Amortization Expense Buildings Buildings under Lease Cash Cost of Goods Sold Deferred Profit on Sale-Leaseback Depreciation Expense Equipment Equipment Acquired for Lessee Equipment under Lease Insurance Expense Insurance Payable Insurance Revenue Interest Expense Interest Income Interest Payable Interest Receivable Inventory Land Rental Expense Land under Lease Lease Liability Lease Receivable Legal Expense Loss on Lease Low Value Lease Expense No Entry Obligations under Lease Operating Expenses Prepaid Expenses Prepaid Insurance Prepaid Rent Property Tax Expense Rent Expense Rental Equipment Rent Payable Rent Payable Rent Receivable Rent Revenue Repairs and Maintenance Expense Right-of-Use Asset Sales Revenue Selling Expenses Short-Term Lease Expense Software under Lease Unearned Interest Income Unearned Rent Revenue Vehicles Vehicles under Lease