User Account

All Pages

Calculate the present value lease liability amount

Assignment Help Accounting Basics
Reference no: EM132547609

Question - On 1 July 2019, Harry Ltd leased a machinery from Potter Ltd. The finance lease agreement contained the following provisions:

The lease term is for 3 years, starting on 1 July 2019

The lease is non-cancellable

Annual lease payment, payable on 30th June each year 165,000

The estimated useful life of the machinery 5 years

Estimated residual value of the machinery at end of useful life $30,000

Interest rate implicit in the lease 6%

There is a bargain purchase option that Harry Ltd will be able to exercise at the end of the lease term for $60,000. The annual lease payment includes $15,000 representing payment to the lessor for insurance and maintenance of the machinery.

Required -

a) Calculate the present value lease liability amount as at 1 July 2019.

b) Prepare the journal entries in relation to the lease for the year ending 30 Jun 2020.

 

Reference no: EM132547609

Questions Cloud

Increase the chances of outbreeding : Which of these is not one of the methods used by angiosperms to increase the chances of outbreeding?
Provide the appropriate journal entries : Provide the appropriate journal entries, assuming that Victoria takes two-weeks annual leave after being employed for one year
Why you believe planning is important : Explain in your own words why you believe planning is important. Select one of the following businesses: a large bank, a government agency,
What is the name for the type of accounting : What is the name for the type of accounting that makes the manager of the center accountable for the cost or revenue associated with that department.
Calculate the present value lease liability amount : The estimated useful life of the machinery 5 years. Calculate the present value lease liability amount as at 1 July 2019
Find should finance department increase advertising budget : Find should finance department increase the advertising budget? In your opinion what is the alternative strategy if sales not increase?
Understanding of information security plan : In completing this assignment, you will gain a better understanding of an Information Security Plan.
How much research and development cost should be expensed : Marisa Ltd is involved in a research and development project to createa new diet pill. How much research and development cost should be expensed
Describe how a kidney nephron works : Give an example of a imbalance issue in the kidneys. How will the kidney respond to the imbalance?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Jones company owns 100 of bruce inc and appropriately

jones company owns 100 of bruce inc. and appropriately applies the equity method. during the current year jones sold

  Global value chain management

Research the Electronic Reserve Readings for ISCOM/383, course texts, the University Library, the Internet, or other resources on global value chain and global supply chain management.

  Calculate federal taxable income

Calculate federal taxable income - Calculate the federal tax payable and federal tax expense.

  Compute the annual depreciation on the new equipment

Assuming that depreciation is to be computed on the straight-line basis, compute the annual depreciation on the new equipment that should be provided

  Saffing company purchased the net assets ie assets minus

staffing company purchased the net assets i.e. assets minus liabilities of time management inc. for 390000. time

  Calculate the company''s net sales for the year

Calculate the company's net sales for the year. Prepare a multiple-step income statement that lists the company's net sales, cost of goods sold

  Pose for an audit firm independence

List three types of consulting services that audit firms have provided to their audit clients in recent years. For each item, indicate the specific threats, if any, that the provision of the given service can pose for an audit firm's independence.

  Investments reported as current assets

At December 31, 2013, Hull-Meyers Corp. had the following investments that were purchased during 2013, its first year of operations:

  Bluemark health care inc is owned and operated by dr george

bluemark health care inc. is owned and operated by dr. george hancock the sole stockholder.bluemarks final december 31

  Prepare a comparative income statement

Prepare a comparative income statement, with vertical analysis, stating each item for both 2006 and 2005 as a percent of sales

  Prepare the journal entry for the purchase of the land

BUSI 3423 Prepare the journal entry for the purchase of the land. Prepare any adjusting journal entry that is required at the end of the fiscal year.

  Explain the value of a customer-profitability analysis

Explain the value of a customer-profitability analysis in making management decisions about future operations. Are there times when a company would be better off without a particular customer?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd