Prepare the journal entries in the books of the lessee

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On 30 June 2020 Jerry Limited leased a machine (non-current asset) from Elaine Limited. The following represents the key terms of the lease agreement. Lease term 3 years Annual lease payment (payable in advance on 30 June each year) $82,300 Estimated useful life of the machine 4 years Estimated residual value at the end of the lease term $50,000 Residual value guaranteed by lessee $35,000 Interest rate implicit in the lease 6% The annual lease payments include executory costs of $2,300. Elaine Limited pays the executory costs on behalf of Jerry Limited every year. Jerry Limited intends to return the asset to the lessor at end of the lease term. The costs incurred by Elaine Limited for the preparation of the lease were $4,000. The lease is classified as a finance lease in accordance with AASB 16 'Leases'. Required

Problem (a) Prepare the lease payments schedule for the lessee (show all workings).

Problem (b) Prepare the journal entries in the books of the lessee from 30 June 2020 to 30 June 2021.

Problem (c) Prepare the lease receipt schedule for the lessor (show all workings).

Problem (d) Prepare the journal entries in the books of the lessor from 30 June 2020 to 30 June 2021

Reference no: EM132781335

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