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Sam Automotive Company signs a lease agreement on December 31, 2019, to lease vehicles to Rayan Company. The term of the non-cancelable lease is 5
Sam Automotive Company signs a lease agreement on December 31, 2019, to lease vehicles to Rayan Company. The term of the non-cancelable lease is 5 years, and payments are required at the end of each year. The following information relates to this agreement.
- Fair value of vehicles is 64.1 million SAR
- 3.28% is earn a return on investmment.
- There is no residual value.
- Rayan depreciates its vehicles on a straight-line basis.
- Ownership of the vehicles transfer to Rayan to at the end of the lease.
1) Calculate Lease Amortization ScheduleAnnuity-Due Basis for Rayan Company
2) Write the entries relating to the lease agreement for first 2 years
3) The section relating to the lease transactions (in the balance sheet) at the end of the second year
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