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If the question says how will it be accounted for in the year to 2011, i will have to include $2000 interest accrued for year ended 31 march 2011 right sir ?
In the lease table,the reason why we have to compute for the next year is to find out how much we have to allocate to Non current liability and current liability…did i get that teory right sir ?
Sir, here is a question that i have just attempted …this question is taken from the technical article from ACCA website.
Question
On April 1,2009 Shrub Co entered into an agreement to lease a machine that had an esyimated life of four years.Lease period is also 4 years at which point the asset will be returned to the leasing company.Shrub is required to pay for all maintenance and insurance cost relating yo the asset.Annual rent of $8000 payable in advance from 1 april 2009. Mavhine expected to have nil residual value at end of its life.machine have fair value $ 28000 at the inception of the lease.lessor invludes finance cost of 10% per annum when calculating annual rentals.HOW SHOULD THE LEASE BE ACCOUNTED FOR IN FINANVIAL STATEMENT OF SHRUB FOR THE YEAR END 31 MARCH 2010 ?
may i know why for year 2011 there is no calculation for interest ?? i know year 2010 have to calculate interest…which amounts to $ 2000…