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Shaheen limited entered into an agreement to lease an item of plant with a fair value of $ 700000 on 1 octobor 2008.The lease required four annual payments of $200000 each,commencing on 1 october 2008.The plant has a useful economic life of four years and is to be scrapped at the end of this period.Shaheen is responsible for maintaining and insuring the asset.The implicit interesr rate within the lease is 10%.
Prepare extracts of the financial statements in respect of the leased asset for the year ended 31 march 2009.
Sir I couldn’t get the solution.. pls help sir 🙁How far did you get with your attempt?
Have you watched the leases video and worked through the free course notes?
I’ll certainly help you but I don’t want to work through questions that you have not tried for yourself!
Here’s the start point for you:
700,000 “borrowed” 1.10.2008
(200,000) paid 1.10.2008
500,000 capital outstanding at 1.10.2008
25,000 interest to 31. 3.2009
525,000 outstanding as at 31. 3.2009Can you take it from there?
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