Relating To Question 2 4 Lease Accounting Braddock Ltd Leased A Building Crane From Crane Movers Ltd To Use During The 1 (32.17 KiB) Viewed 16 times
Relating To Question 2 4 Lease Accounting Braddock Ltd Leased A Building Crane From Crane Movers Ltd To Use During The 2 (7.17 KiB) Viewed 16 times
Relating to Question 2(4)- lease accounting Braddock Ltd leased a building crane from Crane Movers Ltd to use during the construction of Sky Utilities Ltd's factory. Braddock Ltd plans to keep the crane after the lease and the lease terms are as follows: Date of lease inception: 1 January 2021 • . Duration of lease: four years Life of lease assets: five years, after which it will have no residual value . Lease payments: $100 000 at the end of each year. Included within the lease payment is an amount of $10 000 representing service cost for the crane. . Interest implicit in the lease: 9% • Bargain purchase option at the end of the lease: $100 000 The crane is to be depreciated on a straight-line basis. Braddock Ltd has yet recorded the necessary journal entries relating to this lease.
Q2(4): Calculate the present value of the lease payments. Prepare the journal entries for the year ended 31 December 2021. (20 marks)
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