Prepare the journal entries for stepney ltd on july

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On 1 July 2019, Stepney Ltd (lessee) contracts to lease a building from Thebarton Ltd (lessor) for 10 years at an annual rental of $100,000, with the first payment payable immediately and subsequent annual payments due on 1 July. The building is expected to have a residual value of $50,000 at the end of the lease term and Stepney Ltd guarantees a residual value of $30,000. The rate of interest implicit in the lease is 6% and the end of the reporting period is 30 June.

Required

Problem 1: Prepare the journal entries for Stepney Ltd (lessee) on 1 July 2019 and 30 June 2020. Show all calculations (Lease liability, Right-of-use Asset, Interest Expense and Depreciation Expense).

Reference no: EM132918894

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