Joplin Ltd entered into a lease agreement on 1 July 2013 with Thomas Ltd.The terms of the lease are as follows: $$\begin{array} { | l | r | l | }
\hline \text { Duration of lease } & 10 \text { years } & \
\hline \text { Useful life of leased asset } & 13 \text { years } & \
\hline \text { Unguaranteed residual } & \$ 2,000 & \
\hline \text { Lease payment } & \$ 1,000 & \text { at inception } \
\hline \text { Lease payments (in arrears) } & \$ 2,500 & \begin{array} { l }
\text { per year (10 payments) } \
\text { due } 30 \text { June }
\end{array} \
\hline
\end{array}$$ The interest rate implicit in the lease is 6% and the fair value of the leased asset at the inception of the lease is $20517.The lease is non-cancellable and at the end of the lease the asset is returned to the lessor.The economic benefits provided by the lease asset are expected to be consumed evenly over its life.What is the value of the lease asset and lease liability in the books of the lessee after adjusting entries made on 30 June 2014?

Question

Joplin Ltd entered into a lease agreement on 1 July 2013 with Thomas Ltd.The terms of the lease are as follows: $$\begin{array} { | l | r | l | } 
\hline \text { Duration of lease } & 10 \text { years } & \
\hline \text { Useful life of leased asset } & 13 \text { years } & \
\hline \text { Unguaranteed residual } & \$ 2,000 & \
\hline \text { Lease payment } & \$ 1,000 & \text { at inception } \
\hline \text { Lease payments (in arrears) } & \$ 2,500 & \begin{array} { l } 
\text { per year (10 payments) } \
\text { due } 30 \text { June }
\end{array} \
\hline
\end{array}$$ The interest rate implicit in the lease is 6% and the fair value of the leased asset at the inception of the lease is $20517.The lease is non-cancellable and at the end of the lease the asset is returned to the lessor.The economic benefits provided by the lease asset are expected to be consumed evenly over its life.What is the value of the lease asset and lease liability in the books of the lessee after adjusting entries made on 30 June 2014?

Quizplus · Accepted Answer

The Answer of Joplin Ltd entered into a lease agreement on 1 July 2013 with Thomas Ltd.The terms of the lease are as follows: $$\begin{array} { | l | r | l | } 
\hline \text { Duration of lease } & 10 \text { years } & \
\hline \text { Useful life of leased asset } & 13 \text { years } & \
\hline \text { Unguaranteed residual } & \$ 2,000 & \
\hline \text { Lease payment } & \$ 1,000 & \text { at inception } \
\hline \text { Lease payments (in arrears) } & \$ 2,500 & \begin{array} { l } 
\text { per year (10 payments) } \
\text { due } 30 \text { June }
\end{array} \
\hline
\end{array}$$ The interest rate implicit in the lease is 6% and the fair value of the leased asset at the inception of the lease is $20517.The lease is non-cancellable and at the end of the lease the asset is returned to the lessor.The economic benefits provided by the lease asset are expected to be consumed evenly over its life.What is the value of the lease asset and lease liability in the books of the lessee after adjusting entries made on 30 June 2014?

Joplin Ltd Entered into a Lease Agreement on 1 July