Capital Co entered into a sale and leaseback on 1 April 20X7. It sold a lathe with a carrying amount of $300,00 for $ 400,000 (equivalent to fair value) and leased it back over a five-year period, equivalent to its remaining useful life. The transaction constitutes a sale in accordance with IFRS 15. The lease provided for five annual payments in arrears of $ 90,000. The rate of interest implicit in the lease is 5%. The cumulative value of $1 in five years' time is $4.329 Required What are the amounts to be recognised in the financial statements at 31 March 20X8 in respect of this transaction?

Capital Co entered into a sale and leaseback on 1 April 20X7. It sold a lathe with a carrying amount of $300,00 for $ 400,000 (equivalent to fair value) and leased it back over a five-year period, equivalent to its remaining useful life. The transaction constitutes a sale in accordance with IFRS 15. The lease provided for five annual payments in arrears of $ 90,000. The rate of interest implicit in the lease is 5%. The cumulative value of $1 in five years' time is $4.329 Required What are the amounts to be recognised in the financial statements at 31 March 20X8 in respect of this transaction?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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