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SBRchapter lease

Cchicababes199112y ago
hi i would appreciate if someone can help me pls Question explain how the seller accounts for the sale and lease back transaction. 1. sale at undervalue and operating lease back sale value- 10,000 fair value- 15,000 carrying value- 12,000 my answer is- Dr Bank 10,000 Dr Prepayment 5,000 Cr Disposal a\c (income statement) 15,000 Dr Disposal a\c 12,000 Cr NCA 12,000 this means profit on disposal is 3000. i assumed that a prepayment was made towards the operating lease. however my answer is not correct. it should have been Dr bank 10,000 Cr disposal 10,000 Dr Disposal 12,000 Cr NCA 12,000 Loss on disposal 2,000 can someone please explain how they got the answer? i guess they got the answer by assuming that the company needed cash immediately so it sold it for a lower value..but this is just an assumption, my calculation above also was based on the assumption that a prepayment was made for the leased asset. i really need help thank you thanks a lot
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