Required information This question has 3 parts. The information for the question will be repeated for each part. Please keep in mind you may need your answers from one part, to solve the next part. Question: Modern Office Solutions Inc. leases most of its office furniture and equipment On January 1, 2021, Modern entered into a five year lease for new equipment. The first payment is to be made at the beginning of the lease and each subsequent payment on December 31. Modern has the option of purchasing the equipment at the end of the lease. The present value of the minimum lease payments is equal to the fair value of the equipment at lease inception Other information is as follows: Fair value of the equipment at lease inception Expected value at the end of the lease Purchase option price (expected to be exercised) Interest rate implicit in the lease (known to Modern) Modern's incremental borrowing rate Expected useful life of the equipment Residual value at the end of 8 years Amortization method for equipment Lease payments $75,000 16,000 8,000 12% 11% 8 years $2,000 Straight line ? Required: C. What amounts relating to this lease and leased asset will appear on Modern's statement of financial position at December 31, 2021? Be specific about the classifications that should be used (4 marks) Complete this question by entering your answers in the tabs below. C. What amounts relating to this lease and leased asset will appear on Modern's statement of financial position (Balance sheet) at December 31, 2021? Be specific about the accounts that should be used. (4 marks) Modern Office Solutions Inc. Statement of Financial Position At December 31, 2021 Capital Assests: Right of Use Asset Acc Depreciation R-O U Asset Right of use Asset, net mirea c. What amounts relating to this lease and leased asset will appear on Modern's statement of financial position at December 31, 20217 Be specific about the classifications that should be used. (4 marks) Complete this question by entering your answers in the tabs below. C. What amounts relating to this lease and leased asset will appear on Modern's statement of financial position (Balance sheet) at December 31, 2021? Be specific about the accounts that should be used. (4 marks) Modern Office Solutions Inc. Statement of Financial Position At December 31, 2021 Capital Assets Right of Use Asset Acc Depreciation R-O-U Asset Right of use Asset, net Current Liabilites Lease Liability - current portion Non-Current Liabilities Lease Liability - non-current Total Liabilities Required information This question has 3 parts. The information for the question will be repeated for each part. Please keep in mind you may need your answers from one part, to solve the next part. Question: Modern Office Solutions Inc. leases most of its office furniture and equipment On January 1, 2021, Modern entered into a five year lease for new equipment. The first payment is to be made at the beginning of the lease and each subsequent payment on December 31. Modern has the option of purchasing the equipment at the end of the lease. The present value of the minimum lease payments is equal to the fair value of the equipment at lease inception Other information is as follows: Fair value of the equipment at lease inception Expected value at the end of the lease Purchase option price (expected to be exercised) Interest rate implicit in the lease (known to Modern) Modern's incremental borrowing rate Expected useful life of the equipment Residual value at the end of 8 years Amortization method for equipment Lease payments $75,000 16,000 8,000 12% 11% 8 years $2,000 Straight line ? Required: C. What amounts relating to this lease and leased asset will appear on Modern's statement of financial position at December 31, 2021? Be specific about the classifications that should be used (4 marks) Complete this question by entering your answers in the tabs below. C. What amounts relating to this lease and leased asset will appear on Modern's statement of financial position (Balance sheet) at December 31, 2021? Be specific about the accounts that should be used. (4 marks) Modern Office Solutions Inc. Statement of Financial Position At December 31, 2021 Capital Assests: Right of Use Asset Acc Depreciation R-O U Asset Right of use Asset, net mirea c. What amounts relating to this lease and leased asset will appear on Modern's statement of financial position at December 31, 20217 Be specific about the classifications that should be used. (4 marks) Complete this question by entering your answers in the tabs below. C. What amounts relating to this lease and leased asset will appear on Modern's statement of financial position (Balance sheet) at December 31, 2021? Be specific about the accounts that should be used. (4 marks) Modern Office Solutions Inc. Statement of Financial Position At December 31, 2021 Capital Assets Right of Use Asset Acc Depreciation R-O-U Asset Right of use Asset, net Current Liabilites Lease Liability - current portion Non-Current Liabilities Lease Liability - non-current Total Liabilities
