User Account

All Pages

Prepare the lease schedules for the lessee

Assignment Help Accounting Basics
Reference no: EM133169164

Question - In 2021, Vale do Rio Doce Ltd. had a financial crisis which forced them to make drastic decisions to reduce their operating costs. Vale owned a machine which was important for generating income. However, BHP Billiton could not find a similar machine on the market. Due to their strong relationship, Vale do Rio Doce Ltd. decided to lease their machine to BHP Billiton. On 30 June 2022, BHP Billiton Ltd. leased the machine from Vale do Rio Doce Ltd.

The finance lease agreement contained the following provisions:

Lease term 4 years

Annual rental payment, in advance on 30 June each year (starting at 30/06/2022) $43,400

Estimated useful life of asset 5 years

Estimated residual value of machine at end of lease term $12,000

Residual value guarantee by lessee $9,000

Interest rate implicit in the lease 9%

The lease is cancellable, but only with the permission from the lessor. Included in the annual rental payment is an amount of $1,340 to cover the costs of maintenance and insurance paid for by the lessor. BHP Billiton Ltd. intends to return the machine to the Vale do Rio Doce Ltd.

Required -

a. Prepare the lease schedules for the lessee.

b. Prepare the journal entries of the lessee on 30 June 2023.

Reference no: EM133169164

Questions Cloud

Does it appear she will be able to return to school : Also take into consideration the excess cash not invested in the TFSA mutual fund. Does it appear she will be able to return to school
Describe how self-branding allows individuals : a) Describe how corporate social responsibility allows companies to advertise and promote themselves, and how this is done.
Examples of maritime cyber terrorism : Define and give examples of maritime Cyber terrorism. How does it threaten port security operations now and in the future? Be specific
Explain container on board the vessel : You are a 5PL - outline the necessary steps to move a 40' container from the finished goods warehouse to the ocean vessel. You have just received a call /email
Prepare the lease schedules for the lessee : The lease is cancellable, but only with the permission from the lessor. Prepare the lease schedules for the lessee
The challenges of cash flow : How typical are the cash flow problems that these companies face? Explain. What advice can you offer business owners about managing their cash flow?
Catching the entrepreneurial spirit : How is staying motivated as an entrepreneur similar to being motivated to pursue a college degree? Do you think the two are related? How?
Apply decision-making techniques : Apply decision-making techniques. Evaluate resources and actions required for implementation. Evaluate ethical implications of a decision.
Has the internet changed the way consumers think and behave : Has the Internet changed the way consumers think and behave? What are the benefits? What are the pitfalls?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Calculate the work in process beginning

The total manufacturing cost for the year was P683,000; the cost of goods available for sale totaled P740,000; Calculate the Work in Process beginning

  Determine the contribution margin in dollars

In the month of June, Paula's Beauty Salon gave 3,300 haircuts, shampoos, Determine the contribution margin in dollars, per unit, and as a ratio

  How much should he set aside today for the purchase

Stephen plans to purchase a car in 5 years from now. The car will cost 32,000 at that time. How much should he set aside today for the purchase

  FI6315 Managerial Finance Question

FI6315 Managerial Finance assignment help and solutions, New England College, assessment help - Describe the financial crisis of 2007- 2009. What were.

  Internal control environment

Internal Control Environment

  Make a portfolio of investments

Make a Portfolio of investments, if I am a medium risk-taking person. Give your justification why have you made the investment in those portfolios

  Did the companys dividends exceed its net income

Was the company profitable? Which financial statement indicates this? Did the company's dividends exceed its net income? Which financial statement indicates this? Is the company financed mainly by creditors or stockholders? Which financial statement ..

  What the revenue variance for march would be

What the revenue variance for March would be? Dinham Kennel uses tenant-days as its measure of activity, an animal hospital housed

  Complete the consolidated statements workpaper for pruin

Complete the consolidated statements workpaper on the next page for Pruin Corporation and Satto Corporation for December 31, 2017

  During 2010 carson network inc which designs network

during 2010 carson network inc. which designs network servers earned revenues of 800 million. expenses totaled 590

  Journalize the transactions for patrick corporation

Patrick Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. Journalize the transactions for Patrick Corporation

  What is the YTM

A bond sold by NVDIA Corp. has a face value on $100, The first coupon payment occurs a year from now. The market price is $80, what is the YTM

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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