11. On 1 July 2020, Sami Ltd leased a machine from Jimmy Ltd.The machine cost Jimmy Ltd OMR1,300,000 to manufactureand had a fair value of OMR1,541,090 on 1 July 2020. The leaseagreement contained the following provisions:Lease term|4 years|Annual rental payment, in advance on 1 July each year OMR 415,000|Residual value at end of the lease termResidual guaranteed by lesseeInterest rate implicit in leaseThe lease is cancellable only with the permission of the lessor.OMR 150,000nil8%The expected useful life of the machine is 6 years. Sami Ltdintends to return the machine to the lessor at the end of the leaseterm. Included in the annual rental payment is an amount ofOMR15,000 to cover the costs of maintenance and insurance paidfor by the lessor.RequiredA. Prepare the lease payment schedule for the lessee (show allworkings); andB. Prepare the lease receipt schedule for the lessor (show allworkings)

A. Lease payment by lessee: Cost of lease= Present value of lessee rent (-) present value of tax…

Answered: Required A. Prepare the lease payment…

Required A. Prepare the lease payment schedule for the lessee (show all workings); and B. Prepare the lease receipt schedule for the lessor (show all workings)

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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