Question

1. Prepare journal entries for Platino Bhd at the inception date of each lease.
2. For each of the assets, provide an analysis to determine the type of lease for lessor using the following schedule.

Platino Bhd leases the following assets from three lessors. The assets are to be used in the property deveopment of the company. The details of the assets are as follows: Lessor Colton Bhd Marlsha Bhd Tinker Bhd Type of asset Excavator Truck Crane Yearly rental RM15,000 (first payment on 31 December 2020) RM12,000 (first payment on 28 February 2021) RM10,000 first payment on 30 June 2020) Inception date 1 January 2020 1 March 2020 1 July 2019 Lease term 10 years 7 years 5 years Estimated economic life 20 years 9 years 10 years Purchase option RM75,000 at end of None None year 10 Renewal option None None None RM220,000 RM150,000 RM55,000 Fair value at the Inception of lease -0- Guaranteed residual value RM15,000 RM10,000 RM90,000 RM11,000 RM10,000 Estimated residual value at end of lease term Implicit rate 5% 496 496 Transfer of title? Yes/No Contain purchase option? Economic life test PV of lease payment equals at least substantially all of FV of the leased asset? Type of lease