Determine the interest expenses and lease liability

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Reference no: EM132477377

Point 1: SC Academy Ltd has a 31 December year end.

Point 2: SC Academy acquired an equipment under a finance lease agreement on 1 January 2018. Lease payments are $10,000 annually for three years, payable in arrears, the first instalment being due on 31 December 2018.

Point 3: The equipment would have cost $26,000 to buy outright and the estimated economic useful life of the asset is four years with zero residual value. The rate of interest implicit in the lease is 7%

Question a. Complete the amortisation schedule to determine the interest expenses and lease liability. Round all answers to the nearest dollar.

Year ending

Lcasc
Payable
Beg. Bal

$

Interest
Expense

$

Lease
payment

$

Reduction in
Lease
liability

$

Lease
Payable
End. Bal

$

31 Dec
2018

Blank 1

Blank 2

Blank 3

Blank 4

Blank 5

31 Dec
2019

Blank 6

Blank 7

Blank 8

Blank 9

Blank 10

31 Dcc
2020

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Reference no: EM132477377

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