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Schwann Ltd Enters into a Non-Cancellable 5-Year Lease for Office

Question 52

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Schwann Ltd enters into a non-cancellable 5-year lease for office space in Bigtown's central business district.The building has an expected remaining life of 40 years.Schwann Ltd has been offered a free fit-out of the office as an incentive to take up the lease.The fit-out would have cost Schwann Ltd $90,000 to do itself.The benefits of the fit-out are to be recognised on a straight-line basis.The rental payments are $110,000 per annum.How would the signing of the lease and the first rental payment be recorded by Schwann Ltd in accordance with UIG Abstract 3?


A) Schwann Ltd enters into a non-cancellable 5-year lease for office space in Bigtown's central business district.The building has an expected remaining life of 40 years.Schwann Ltd has been offered a free fit-out of the office as an incentive to take up the lease.The fit-out would have cost Schwann Ltd $90,000 to do itself.The benefits of the fit-out are to be recognised on a straight-line basis.The rental payments are $110,000 per annum.How would the signing of the lease and the first rental payment be recorded by Schwann Ltd in accordance with UIG Abstract 3? A) B) C) D) E) None of the given answers.
B) Schwann Ltd enters into a non-cancellable 5-year lease for office space in Bigtown's central business district.The building has an expected remaining life of 40 years.Schwann Ltd has been offered a free fit-out of the office as an incentive to take up the lease.The fit-out would have cost Schwann Ltd $90,000 to do itself.The benefits of the fit-out are to be recognised on a straight-line basis.The rental payments are $110,000 per annum.How would the signing of the lease and the first rental payment be recorded by Schwann Ltd in accordance with UIG Abstract 3? A) B) C) D) E) None of the given answers.
C) Schwann Ltd enters into a non-cancellable 5-year lease for office space in Bigtown's central business district.The building has an expected remaining life of 40 years.Schwann Ltd has been offered a free fit-out of the office as an incentive to take up the lease.The fit-out would have cost Schwann Ltd $90,000 to do itself.The benefits of the fit-out are to be recognised on a straight-line basis.The rental payments are $110,000 per annum.How would the signing of the lease and the first rental payment be recorded by Schwann Ltd in accordance with UIG Abstract 3? A) B) C) D) E) None of the given answers.
D) Schwann Ltd enters into a non-cancellable 5-year lease for office space in Bigtown's central business district.The building has an expected remaining life of 40 years.Schwann Ltd has been offered a free fit-out of the office as an incentive to take up the lease.The fit-out would have cost Schwann Ltd $90,000 to do itself.The benefits of the fit-out are to be recognised on a straight-line basis.The rental payments are $110,000 per annum.How would the signing of the lease and the first rental payment be recorded by Schwann Ltd in accordance with UIG Abstract 3? A) B) C) D) E) None of the given answers.
E) None of the given answers.

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