On July 1 2015, Duncan Ltd entered a 3-year non-cancellable lease agreement with a nance company for equipment. The annual lease payments are $38 803 commencing on 30 June 2016. The fair value of the equipment was $100 000 and the rate implicit in the lease was 8%. Assume the lease was a nance lease. Duncan uses straight-line depreciation for similar equipment.
Required
- (a) Prepare the lease repayment schedule. (Hint: See gure 9.9, p. 554.)
- (b) Prepare the journal entries in the books of Duncan Ltd for the year ending 30 June
- 2016.
- (c) Prepare a extract from the statement of nancial position as at 30 June 2016
- providing the gures for the leased asset. (Hint: Ensure you identify the current and non-current portions of the loan.)
