Complete a lease schedule for the four years

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Question - On 1 July 2018, acquired equipment under a four-year finance lease agreement from. The present value of the lease payments is $431,213. It has an estimated useful life of five years and estimated residual value of $31,213. The implicit rate of interest on the lease was 8% per annum. The lease involved five payments, an initial payment of $100,000 and four annual payments on 30 June each year of $100,000.

(a) Briefly explain, according to the Conceptual Framework, with particular reference to the qualitative characteristic of relevance, what information value is provided by the use of present value to measure the lease for Kennard's Ltd and Milano Motors Ltd.

(b) Complete a lease schedule for the four years up to and including 30 June 2022.

(c) Prepare the Income Statement for the year ended 30 June 2020.

(d) Prepare the Balance Sheet extract as at 30 June 2020.

Reference no: EM132981260

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