(a)
Date | Particulars | Debit | Credit |
1-Jan-20 | Lease Receivable | $1,993,646 | |
Right of use asset | $1,993,646 | ||
(To record cost of building) | |||
1-Jan-20 | Cash Dr | $285,000 | |
To Lease revenue | $285,000 | ||
(To record lease revenue) | |||
31-Dec-20 | Lease Receivable | $153,777 | |
Interest Revenue | $153,777 | ||
(To record recognition of revenue for each period) | |||
31-Dec-20 | Depreciation Expense | $199,363 | |
To Right of use asset | $199,363 | ||
(To record depreciation expense ) | |||
Working:
Lease Payment | $285000 |
Lease Term | 10 years |
Rate | 9% |
Lease Value | $1993646.25 |
(285000*(1+5.9952)) | |
Depreciation Expense = | $199363.2 |
(1993632/10 years) | |
Interest | $153776.88 |
((1993632-285000)*9%) | |
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