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Show the income statement extract

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Question - John has decided to lease some plant and machinery. The lease is for four years at an annual cost of $2,000.00 payable annually in arrears. The normal cash price (fair value) of the asset is $5,900.00. The rate of interest is 15%.

Required:

a) Show the initial accounting entries for the carrying value of the asset and liability.

b) Show the income statement extract.

c) Show the balance sheet extract clearly showing the amount for current liability and non-current liabilities.

Reference no: EM132606910

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