sale and leaseback

This topic has 3 replies, 2 voices, and was last updated 4 years ago by Stephen Widberg.

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July 30, 2021 at 11:28 am #629855
kennigara
Participant
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Hi Dear Tutor, I have a question.
the example in opentuition named as Apple when it the performance obligation is not satisfied
in the case of no sale.
seller-lessee
continue to recognise the asset
recognisae the liability
debit asset-1000000
credit lease liability-10000000
do i recognise the asset @ 8.4 mln or 10 mln?
do my double entries are correct from lessee side?
do not recognise the asset
recognise the financial asset(proceeds)
buyer-lessor
debit receivable–1000000
credit asset–10000000
do my double entries are corriect from lessor side?
July 31, 2021 at 7:36 am #629894
Stephen Widberg
Keymaster
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asset – continue to recognise at existing carrying amount
liability – recognise at amount of cash received from the ‘purchaser’
July 31, 2021 at 1:25 pm #629938
kennigara
Participant
- Topics: 193
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could you give its journal entries for seller and buyer side ?
August 1, 2021 at 4:43 pm #630054
Stephen Widberg
Keymaster
- Topics: 17
- Replies: 3449
As you know this exam is not about writing journals. You can refer to one of the study manuals if you want them, but you will be wasting study time.
All you have to is to explain accounting treatment.
Seller – as explained above
Buyer – will recognise a receivable
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