INSTRUCTION: This section consists of TWO (2) structured question. Answer ALL questions. QUESTION 1 On 1 January 2020, Bliss Bhd signed a non-cancellable lease contract to lease a machine for a lease term of three years. Annual lease payment of RM60,000 payable in arrears at the end of each year. At the commencement date of the lease, the interest rate implicit in the lease at 5% per annum. Fees in relation to the preparation of lease contract amounted to RM4,605. Present value of lease payments amounted to RM163,395. The company closes its accounts on 31 December each year. Required: (a) Fill in the following lease liability table with correct figures from 2020 to 2022 (round up the interest expense to the nearest RM). Carrying Years amount b/f (RM) Carrying amount c/f Interest Instalment (RM) (RM) (RM) 2020 2021 2022 (b) Prepare the journal entries to record the initial measurement, interest charge, instalment payment and depreciation of right of use asset in the financial year 2020 (first year only). (c) Prepare the extracted statement of financial position on 31 December 2020.

INSTRUCTION: This section consists of TWO (2) structured question. Answer ALL questions. QUESTION 1 On 1 January 2020, Bliss Bhd signed a non-cancellable lease contract to lease a machine for a lease term of three years. Annual lease payment of RM60,000 payable in arrears at the end of each year. At the commencement date of the lease, the interest rate implicit in the lease at 5% per annum. Fees in relation to the preparation of lease contract amounted to RM4,605. Present value of lease payments amounted to RM163,395. The company closes its accounts on 31 December each year. Required: (a) Fill in the following lease liability table with correct figures from 2020 to 2022 (round up the interest expense to the nearest RM). Carrying Years amount b/f (RM) Carrying amount c/f Interest Instalment (RM) (RM) (RM) 2020 2021 2022 (b) Prepare the journal entries to record the initial measurement, interest charge, instalment payment and depreciation of right of use asset in the financial year 2020 (first year only). (c) Prepare the extracted statement of financial position on 31 December 2020.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.9E: Leased Assets Koffman and Sons signed a four-year lease for a forklift on January 1, 2016. Annual...

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Identify the differences between a Finance Lease and an Operating Lease 5.2. hijk Ltd leases an asset as a lessee. The lease agreement is for 6 years. Lease instalments of R145 545 made at the beginning of the period and interest rate is 9%. The commencement of the lease is 1 April 2021. Asset is depreciated over 4 years. The tax rate is 28%. Lease payments are allowed as a deduction when paid. Profit before tax is R600 000 Journalise the transactions for the year ended 31 December 2021 (Journal narrations are required)
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Question 1. On 1 July 2019, Fisher Ltd decides to lease a cargo ship from XFinance Ltd. The term of the lease is 20 years. The implicit interest rate in the lease is 10 per cent. The fair value of the cargo ship at the commencement of the lease is $2,215,560. The lease is non-cancellable, and requires a lease payment of $300,000 on inception of the lease (on 1 July 2019) and lease payments of $250,000 on 30 June each year (starting 30 June 2020). Included within the $250,000 lease payments is an amount of $25,000 representing payment to the lessor for the insurance and maintenance of the cargo ship. There is no residual payment required. Annuity factor, n=20; r = 10% is 8.5136.a) Prove that the interest rate implicit in the lease is 10 per cent. b) Provide the entries for the lease in the books of Fisher Ltd as at 1 July 2019, and 30 June 2020. c) Provide the entries for the lease in the books of XFinance Ltd as at 1 July 2019, and 30 June 2020.
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