Reference no: EM133062455

Questions -

Q1. On 1 January 2017, Coolie Ltd leased office space under a three-year lease agreement. The arrangement specified that three annual rent payments of $80,000 each was to be made at the beginning of each year (i.e.: on 1 January of each year). The implicit interest of Coolie Ltd was 7% per annum. Prepare the lease amortisation schedule for the period of the lease

Q2. On 1 January 2018, Aladdin Ltd leased 5 high end massage chairs for 2 years. The massage chairs will be placed in its staff lounge of its 5 branches all over Singapore. This is to provide its employees a place to relax and recharge during their break in the hope of improving work effectiveness and efficiency of their employees. In the contract, it states that Aladdin is required to make 4 semi-annual payments of $50,000 each during the lease period. Payments are to be made on 1 January and 1 July of each year. The implicit interest rate on 1 January 2018 is 6% per annum. Prepare the lease amortisation schedule for the period of the lease.

Q3. Marvel Ltd entered into a contract to lease an office space for 5 years with annual lease payment of $45,000 payable at the end of each year. The contract stipulates that Marvel has an option to extend the lease term by 2 years for a revised annual lease payment of $50,000. Two months before the end of the 5 year contract, Marvel exercised its option to extend the lease term by another 2 years. Marvel's incremental borrowing rate was 5% and 7% per annum at lease inception and lease extension respectively. Prepare the lease amortisation schedule for the 7-year period of the lease.