The lease is cancellable only with the permission, Accounting Basics

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The lease is cancellable only with the permission

On 1 July 2011, Cladd Ltd leased a tractor from Ally Ltd. The tractor cost Ally Ltd $120,697. The lease agreement contained the following provisions:

Lease term - 3 years
Estimated useful life of tractor - 4 years
Annual lease payment, payable on 30 June each year - $39,000
Estimated residual value of tractor at end of lease term - $22,000
Residual value guaranteed by Cladd Ltd - $16,000
Interest rate implicit in lease - 7%

The lease is cancellable only with the permission of the lessor.

Question:(a) Classify the lease for Cladd Ltd.
(b) Prepare the lease payment schedule for Cladd Ltd and its journal entries to record the lease for the year ended 30 June 2012.

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Accounting Basics: The lease is cancellable only with the permission

Reference No:- TGS0710412

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Accounting Basics: The lease is cancellable only with the permission

Reference No:- TGS0710412

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

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Ask an Expert for Answer!!

Accounting Basics: The lease is cancellable only with the permission

Reference No:- TGS0710412

Recent Questions Asked Accounting Basics

Q : Create confidence interval on difference in fraction

Q : Coefficient of determination between two variables

Q : What effect does this have on the industry supply curve

Q : What is the expected activity of uranium

Q : The lease is cancellable only with the permission

Q : Draw profit diagrams

Q : Compute profit diagrams

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Q : Find sample size to ensure probability of type two error

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