X company leased machines to company 2 on the first January 2017 for the period of 15 years. The cost as at first of January 2017 was $1m. We estimated the useful life for 15 years. Depreciation is to be made in a straight line method with no residual. The lease has an acknowledge implicit value of 10%. Lease payment are to be $131 473 which are due of 31st December every year

Required:

1. Identify lease with the reason?

2. Journal entries for the lease for the period of 5 years ? Summarize the meaning of the following terms used in the accounting for liabilities

3.Account payable

4.Note payable 

5.Bank account overdraft

6.Current portion of the long term debt 

7.Current lease payment 

8.Tax payable

9.Dividend payable 

10..Using appropriate computation company tax example explain how taxation takes place in a company