3. Present value of the minimum lease payments
= Initial annual payment + (Annual lease payments x Present value of ordinary annuity 3 payments of 1)
= 12500 + 12500*2.62432 = 45304
4.Lease liability amortization table for first four years
Present period |
opening Balance |
Interest |
Cash Payment |
Decrease in Balance |
Ending Balance |
20X2 | 45304 | ||||
20X2 | 45304 | 0 | 12500 | 12500 | 32804 |
20X3 | 32804 | 2296.28 | 12500 | 10203.72 | 22600.28 |
20X4 | 22600.28 | 1582.02 | 12500 | 10917.9804 | 11682.3 |
20X5 | 11682.3 | 817.761 | 12500 | 11682.23903 | 0 |
5.
Statement of comprehensive income for the year ended 31 December 20X3 | |
Interest | -1722.21 |
Amortization expense | -8494.5 |
-10216.7 |
Notes: Need to calculate interest & amortization expense for 9 months ( April 1, 20x12 to December 31, 20x13)
Amortization expense(Depreciation) = 45304/ 4 years = 11326 per year
Amortization expense for 9 months = 11326*9/12 = 8494.5
Interest for 9 months = 2296.28*9/12 = 1722.21
6.
Statement of financial position | |
31 December 20X3 | |
Lease liability | |
Short term | 9375 |
12500*9/12 | |
Long term | 316429 |
325804-9375 |
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