Senario 1

ABC Inc. leased a drilling equipment form a regional oil services company. The oil company purchased the drilling equipment from an international drilling equipment manufacturer at a cost of590,078 SR. The following information is given:

What is the Entry for the lease (Lessee side)

Given these information

Lease term :	3 years
Payment frequency:	semiannual (at the end of the periods)
Economic life of the asset	Three years
Payment amount:	120,000 SR
Rate (lessors and the lowest rate)	12%

		Lease Receivable 590.078 Cash 590,078
		Leased equipment 590,078 Lease payable 590,078
		Leased equipment 590,078 Cash 590,078
		Lease Receivable 590.078 Lease Payable 590,078