Prepare the journal entry to account for lease transaction

Assignment Help Managerial Accounting
Reference no: EM132789130

Question - Gryffindor plc signed a five-year finance lease with Slytherin plc on 1 January 2017 when the lease began. The lease requires 5 payments of €158,278.36 to be made at the end of each year. Gryffindor has no renewal option and possession of the asset reverts to the lessor on 1 January 2022. Gryffindor uses the straight-line method to depreciate assets of this type that it owns and the leased asset has an expected useful economic life of six years. The rate of return implicit in the lease is 10%. The present value of the minimum lease payment is €600,000, which is equal to the fair value of the asset. The reporting date of Gryffindor plc is 31 December. Assuming that the fair value of the leased asset is €584,980.52, instead of €600,000, prepare the journal entry to account for the lease transaction in the books of Gryffindor plc on 1 January 2017.

Reference no: EM132789130

Questions Cloud

What is the impact of the journal entries on net income : What is the impact of the journal entries on net income and total comprehensive income for the year ending 30 June 2018
Define supply chain management : Define supply chain management. Describe the essential components of a typical supply chain management process.
What is workforce diversity : What is workforce diversity, why is managing it so important?
Assignment on foreign currency : What is the spot rate for the British pound (GBP) on Wednesday in terms of the U.S. dollar (USD)? Or, from the U.S. perspective, what is the direct quote on pou
Prepare the journal entry to account for lease transaction : Assuming that the fair value of the leased asset is €584,980.52, instead of €600,000, prepare the journal entry to account for the lease transaction
What would have been the realized rate of return : What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period?
What should the focus be in the long run : Data: In 2018, Corp. XYZ reported the following: Revenues = $52 million, COGS = $28 million, Op Exp = $6 million
What is the amount of the expenses : Question - Home Hardware buys a particular type of drill for $170 each less a 20% discount. What is the amount of the expenses
Inventory list is comprehensive chart : The inventory list is a comprehensive chart that lists all of the company's internal resources: equipment, machines, technology, furniture, office supplies, etc

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Calculate the direct materials usage and price variances

Calculate the Direct Materials Usage and Price Variances. During March, Gul Ahmed Fabrics Corporation manufactured 1,000 units of a special multilayer fabric

  What each of the legislation acts is designed

What each of the legislation acts is designed to achieve Income Tax Assessment Act 1997, Fringe Benefits Tax Assessment Act 1986

  Calculate the total labour rate

Calculate the total labour rate and total labour efficiency variances for November, based on the standard cost. Assess the performance of the production manager

  What is meant by the expression time value of money

What is meant by the expression, time value of money - Why should all capital investment proposals include time value of money

  Which financial statements are typically prepared in order

Which Financial statements are typically prepared in the order? Balance sheet, income statement, statement of owner's equity.

  What is the total amount of period costs incurred to sell

What is the total amount of product costs incurred to make 31,500 units? what is the total amount of period costs incurred to sell 29,750 units?

  How much amount of birr for april budgeted cash collection

How much amount of birr for April budgeted cash collection? Collections for sales are 80% in the month of sales and 20% the next month.

  Find what amount of maintenance services total cost

What amount of Maintenance Services total cost is allocated to the Packaging Department? (round to closest whole dollar) Employees are?

  What is the labor rate variance for annapolis company

Annapolis Company, The job was completed in 610 hours and the average actual labor rate was $18.50 per hour. What is the labor rate variance?

  Find what should be total cost estimate for the job

Find What should be your total cost estimate for this job. You are working on estimating a one-of-a kind job for a customer. Your customer has agreed

  Calculate the market-share variance

Calculate the market-share variance and clearly indicate whether the variance is favourable (F) or unfavourable (U). Show all working

  Prepare contribution format income statement for august

Prepare contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution margin.

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!

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