All categories

3 years ago

On 1 July 2019, Fisher Ltd decides to lease a cargo ship from XFinance Ltd. The term of the lease is 20

Business

1 answer:

Alla [95]3 years ago

4 0

Answer:

a. FV of Lease Payment=2215552

b. Debit Credit

Recognition of Lease

01-Jul-19 ROU Asset $2215560

Lease Liability $2215560

30-Jun-20 Recording Lease Payment

Lease Liability $225000

Lease Expense $25000

Bank $250000

30-Jun-20 Recording Interest

Interest Expense $199056

Lease Liability $199056

c. Debit Credit

Recognition of Lease

Lease Receivable $2215560

ROU Asset $2215560

30-Jun-20 Recording Lease receipt

Bank $250000

Fisher Ltd $25000

Lease Receivable $225000

30-Jun-20 Maintainace Expense

Lease Expense$25000

Bank $25000

Fisher Ltd $25000

Lease Expense $25000

30-Jun-20 Recording Interest

Lease Receivable $199056

Interest Expense $199056

Explanation:

According to the given data Interest rate implict in the lease = 10%

Year Lease Discounting PV of Lease Payment

Factor 10%

0 300000 1.0000 300000

1 225000 0.9091 204545

2 225000 0.8264 185950

3 225000 0.7513 169046

4 225000 0.6830 153678

5 225000 0.6209 139707

6 225000 0.5645 127007

7 225000 0.5132 115461

8 225000 0.4665 104964

9 225000 0.4241 95422

10 225000 0.3855 86747

11 225000 0.3505 78861

12 225000 0.3186 71692

13 225000 0.2897 65174

14 225000 0.2633 59250

15 225000 0.2394 53863

16 225000 0.2176 48967

17 225000 0.1978 44515

18 225000 0.1799 40468

19 225000 0.1635 36789

20 225000 0.1486 33445

a. FV of Lease Payment=2215552

b. Journal Entry In the books of Fisher Ltd.

Debit Credit

Recognition of Lease

01-Jul-19 ROU Asset $2215560

Lease Liability $2215560

30-Jun-20 Recording Lease Payment

Lease Liability $225000

Lease Expense $25000

Bank $250000

30-Jun-20 Recording Interest

Interest Expense $199056

Lease Liability $199056

c.Journal Entry

Debit Credit

Recognition of Lease

Lease Receivable $2215560

ROU Asset $2215560

30-Jun-20 Recording Lease receipt

Bank $250000

Fisher Ltd $25000

Lease Receivable $225000

30-Jun-20 Maintainace Expense

Lease Expense$25000

Bank $25000

Fisher Ltd $25000

Lease Expense $25000

30-Jun-20 Recording Interest

Lease Receivable $199056

Interest Expense $199056

You might be interested in

Can you study a bachelor's degree right after high school? Or do you need to graduate first from college or university to then g

Leya [2.2K]

You have to graduate a college or university first

3 0

3 years ago

Read 2 more answers

. Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 4 bars and the price is $4. In year

NikAS [45]

Answer:

Nominal GDP in year 1 = $16

Nominal GDP in year 2 = $25

Nominal GDP in year 3 = $36

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Net export = exports – imports

Nominal GDP is GDP calculated using current year prices

Nominal GDP in year 1 = 4 x $4 = $16

Nominal GDP in year 2 = 5 x $5 = $25

Nominal GDP in year 3 = 6 x $6 = $36

5 0

3 years ago

Audits of financial statements are designed to obtain reasonable assurance of detecting misstatement due to?

alisha [4.7K]

Answer:

Errors, fraud, and noncompliance with laws with a direct effect on financial statement amounts.

<h3>How does the auditor obtain reasonable assurance?</h3>

In order to obtain reasonable assurance, the auditor shall obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion.
Reasonable assurance is obtained when the auditor has thereby reduced audit risk to an acceptably low level.

To learn more about it, refer

to brainly.com/question/24553900

#SPJ4

5 0

1 year ago

Tora Co. plans to produce 1,020 units in July. Each unit requires two hours of direct labor. The direct labor rate is $20 per ho

kompoz [17]

Answer: $40,800

Explanation:

Each unit requires 2 hours of direct labor.

1,020 units would therefore require:

= 1,020 * 2

= 2,040 hours of labor

The direct labor rate is $20 per hour. If there are 2,040 hours to be worked, the cost would therefore be:

= 20 * 2,040

= $40,800

7 0

3 years ago

What is the price paid for the use of borrowed money referred to as?

marshall27 [118]

Interest
Interest is the monetary charge for borrowing money—generally expressed as a percentage, such as an annual percentage rate (APR). Key factors affecting interest rates include inflation rate, length of time the money is borrowed, liquidity, and risk of default. Interest can also express ownership in a company.

3 0

2 years ago