Question 16 Waikato Limited entered into a non-cancellable, ten-year lease agreement with Hillcrest Limited on 1 January 2017. The lease was for a factory equipment that is expected to have an economic life of 15 years, after which time it will have no salvage value. There is a bargain option, which Hillcrest Limited will be able to exercise at the end of the tenth year, for $12,500. Waikato Limited manufactured the equipment at a cost of $428,000. There are to be ten annual instalments of $67,500 per annum. Included in the annual lease payment is an amount of $7,500 per annum representing payment to Waikato Limited for insurance and maintenance of the equipment. The rate of interest implicit in the lease is 24 per cent. Required w Calculate the present value of the minimum lease payments Animal installments Bargain purchase PV of minimum lease payments b. Prepare journal entries in the books of Waikato Limited to record the lease transaction on 1 January 2017. Date Details Debt Credit Lease Receivable Sales COGS leventy te Prepare journal entries in the books of Waikato Limited to record the annual lease payment received for years ended 31 December 2017. Date Details Dehit Credit Cash Executory cost Interest revete Lease ca Prepare journal entries (without narrations) in the books of Hillcrest Limited to record the Icase transaction on 1 January 2017 Dahidi Dan Details Lease factory equipe Lease Payable a cost of $428,000. There are to be ten annual instalments of $67,500 per annum. Included in the annual lease payment is an amount of $7,500 per annum representing payment to Waikato Limited for insurance and maintenance of the equipment. The rate of interest implicit in the lease is 24 per cent. Required Calculate the present value of the minimum lease payments Anal install Bargain purchase PV of minimum lease puyutents hy Prepare journal entries in the books of Waikato Limited to record the lease transaction on 1 January 2017. Dale Details Debicked Lease Recewable CONCES lavesy ter Prepare journal entries in the books of Waikato Limited to record the annual lease payment received for years ended 31 December 2017. Das Details Dhe Credit Cash y cost resten Lease receive (d) Prepare journal entries (without narrations) in the books of Hillcrest Limited to record the lease transaction on 1 January 2017 Daldetails Del Credit Lease factory equipment Lease Payable ce Prepare journal entries in the books of Hillerest Limited to record the annual lease payment paid for years ended 31 December 2017 Dal Details Debude Escort terested Lease payable Kash Question 16 Waikato Limited entered into a non-cancellable, ten-year lease agreement with Hillcrest Limited on 1 January 2017. The lease was for a factory equipment that is expected to have an economic life of 15 years, after which time it will have no salvage value. There is a bargain option, which Hillcrest Limited will be able to exercise at the end of the tenth year, for $12,500. Waikato Limited manufactured the equipment at a cost of $428,000. There are to be ten annual instalments of $67,500 per annum. Included in the annual lease payment is an amount of $7,500 per annum representing payment to Waikato Limited for insurance and maintenance of the equipment. The rate of interest implicit in the lease is 24 per cent. Required w Calculate the present value of the minimum lease payments Animal installments Bargain purchase PV of minimum lease payments b. Prepare journal entries in the books of Waikato Limited to record the lease transaction on 1 January 2017. Date Details Debt Credit Lease Receivable Sales COGS leventy te Prepare journal entries in the books of Waikato Limited to record the annual lease payment received for years ended 31 December 2017. Date Details Dehit Credit Cash Executory cost Interest revete Lease ca Prepare journal entries (without narrations) in the books of Hillcrest Limited to record the Icase transaction on 1 January 2017 Dahidi Dan Details Lease factory equipe Lease Payable a cost of $428,000. There are to be ten annual instalments of $67,500 per annum. Included in the annual lease payment is an amount of $7,500 per annum representing payment to Waikato Limited for insurance and maintenance of the equipment. The rate of interest implicit in the lease is 24 per cent. Required Calculate the present value of the minimum lease payments Anal install Bargain purchase PV of minimum lease puyutents hy Prepare journal entries in the books of Waikato Limited to record the lease transaction on 1 January 2017. Dale Details Debicked Lease Recewable CONCES lavesy ter Prepare journal entries in the books of Waikato Limited to record the annual lease payment received for years ended 31 December 2017. Das Details Dhe Credit Cash y cost resten Lease receive (d) Prepare journal entries (without narrations) in the books of Hillcrest Limited to record the lease transaction on 1 January 2017 Daldetails Del Credit Lease factory equipment Lease Payable ce Prepare journal entries in the books of Hillerest Limited to record the annual lease payment paid for years ended 31 December 2017 Dal Details Debude Escort terested Lease payable Kash
