ca,ch10,Question 10 - Question 10.3 Acoungftiraelspdhby les...

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Question 10.3 A cou n t i g fo ra f an c e lea se an d o p ra t i n g le a b y h le se On 1 July 2015, Highway 99 Ltd entered into a finance lease for a motor vehicle. The lease term is for 5 years, at the end of which Highway 99 Ltd pays the guaranteed residual value of $7000 for ownership of the vehicle. Lease payments of $13 000 are paid annually in advance, while the residual is paid at the end of the lease. Highway Ltd is separately responsible for maintenance of the vehicle, and for registration and all insurance costs. Highway 99 Ltd has a year end of 30 June. The lease repayments schedule is as follows: HIGHWAY 99 LTD Extract of Lease Payments Schedule Minimum lease pay- ments Interest ex- pense Reduction in liability Balance of liability 1 July 2015 1 July 2015 1 July 2016 1 July 2017 1 July 2018 1 July 2019 30 June 2020 $ 13 000 13 000 13 000 13 000 13 000 7 000 $ 5 668 4 678 3 555 2 280 833 $ 13 000 7 332 8 322 9 445 10 720 6 167 $ 54 986 41 986 34 654 26 332 16 887 6 167 Required A. Based on the lease repayment schedule, prepare the journal entries of
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  • Three '11
  • fanfhu
  • Accounting, 2010s, Years in the future, Highway 99 Ltd

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