Dear Student , In Question , asked or only lease Amortization table ,. I have provided the same below . Question not asked for any Journal Entries . Please let me know if any one is looking for Journal Entries of lease accounting . I will provide the same .
Thank You!!
Lease entered 1st Jan 2021 | |||||
Cost of Equipment $ 260,000 | |||||
Lease Term | 2 year= 8 Quarterly periods | ||||
Quarterly payment $ | 25000 | ||||
Economic life of the asset | 5 Years | ||||
Interest rate | 12% | ||||
Mainly need to prepare " Amortization table " | |||||
Interest rate = Quarterly basis | 3% | (12%/4) | |||
Calculate Present Value of Annuity | |||||
Qtr 1 | 0.97 | ||||
Qtr 2 | 0.94 | ||||
Qtr 3 | 0.92 | ||||
Qtr 4 | 0.89 | ||||
Qtr 5 | 0.86 | ||||
Qtr 6 | 0.84 | ||||
Qtr 7 | 0.81 | ||||
Qtr 8 | 0.79 | ||||
Sum of Discount Factor | 7.02 | ||||
Quarterly payment $ | 25000 | ||||
present value $ | 1,75,492 | ||||
($25000*7.02) | |||||
Lease Amortization table | |||||
Date | Payment $(a) | Interest($)-b | Amortization$-c | Lease value $-d | |
1/1/2021 | 1,75,492 | ||||
1/1/2021 | 25000 | 1,50,492 | (d-a) | ||
31/3/2021 | 25000 | 4,515 | 20,485 | 1,30,007 | (d-c) |
30/6/2021 | 25000 | 3,900 | 21,100 | 1,08,907 | |
30/9/2021 | 25000 | 3,267 | 21,733 | 87,175 | |
31/12/2021 | 25000 | 2,615 | 22,385 | 64,790 | |
31/3/2022 | 25000 | 1,944 | 23,056 | 41,733 | |
30/6/2022 | 25000 | 1,252 | 23,748 | 17,985 | |
30/9/2022 | 25000 | 540 | 24,460 | - | |
In general Interest calculated =3% on Lease value | |||||
Amortization value = Lease payment - Interest amount | |||||
Lease value = Erlie Qtr closing value - Current Qtr Amortization value |
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