Preparea lease schedule for the three years of the lease

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Question

On 1 July 2016, Trippier Ltd entered into a non-cancellable, three-year lease of a computer system. The computer had a fair value of $15,100 and a present value of the minimum lease payments of $14,934. The computer had an estimated useful life of 4 years and a zero-residual value.

The lease involved an initial payment of $2,500 on 1 July 2016 plus 3 annual payments of $5,000. Payments, except for the initial payment, are made on 30 June each year. The implicit interest rate in the lease is 10% p.a. Ownership of the computer system will transfer to the company at the end of the lease term.

Required:

(i) Preparea lease schedule for the three years of the lease.

(ii) Assuming the lease is treated as a finance lease, record in general journal form, all journal entries relating to the lease asset AND lease liability for the year ending 30 June 2017.

Reference no: EM132323055

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