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Chapter 3-Lease Contract

The income statement for year 1 shows amortization expense of $7,986 and interest expense of $3,194 for a total expense of $11,180. The balance sheet shows lease assets of $39,930 with accumulated amortization of $7,986, resulting in a net lease asset of $31,944. The lease liability is $33,124 which is the beginning liability of $39,930 minus the principal payment for the year of $6,806.

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78 views5 pages

Chapter 3-Lease Contract

The income statement for year 1 shows amortization expense of $7,986 and interest expense of $3,194 for a total expense of $11,180. The balance sheet shows lease assets of $39,930 with accumulated amortization of $7,986, resulting in a net lease asset of $31,944. The lease liability is $33,124 which is the beginning liability of $39,930 minus the principal payment for the year of $6,806.

Uploaded by

marsupilami
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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b) Income statement Balance sheets

31-Dec, Year 1 31-Dec, Year 1


Amortization expense 7986 Assets
Interest expense 3,194 Total value of lease assets 39930
Operating expenses 11,180 Less: Accumulated amortization 7986
Lease property under capital lease 31944
ko account cash vì ko biết đc beg. amount của cash là bnh
Liabilities
Lease liability under capital lease 33,124
(beg. lease liability - principle amount/ lease liability trong year1)
a) Under Capital lease
MPLs 10,000
PV (of the leased asset and the 39930
Interest (each year) 3,194 the beginning-year liability multiplied by the interest rate
principal amortization (each ye 6,806 total payment each year less interest
amortization (straight line m 7986

leasee Initial measurement (ghi nhận ban đầu)


(record theo nguyên giá (Cost))
Non-current assets Current & non-current liabilities
Enter lease contract
1-Jan-year 1 Dr. Right of use assets/ Prope 39930 số này đc c
Cr. Lease liability 39930
Rental Payment
31-Dec-year 1 Dr. Interest expense 3,194
Dr. Lease liability 6,806
Cr. Cash 10000
Ghi nhận tiếp theo (Subsequent measurement)
Amortization of ROU/Property Rights
Dr. Amortization expense 7986
Cr. Accumulated Depr 7986

mount của cash là bnh

nt/ lease liability trong year1)


tiplied by the interest rate

c)
Interest & principle components of MLP
Year Beg. Liability interest principle of total Year-end liability
1 39,930 3,194 6,806 10,000 33,124
2 33,124 2,650 7,350 10,000 25,774
3 25,774 2,062 7,938 10,000 17,836
4 17,836 1,427 8,573 10,000 9,263
5 9,263 737 9,263 10,000 -
10,070 39,930 50,000

d) Income Statement Effects of Alternative Lease Accounting Method


Capital lease
Year Amortization interest exp total expense
1 7986 3,194 11,180
2 7986 2,650 10,636
3 7986 2,062 10,048
4 7986 1,427 9,413
5 7986 737 8,723

e) year 1,2,3: total exp > CF (10000)


year 4,5 : reverse
a) C= (coupon rate x FV) / period payment a year
3000000
Bond price = C x [(1+r)^-n]/r + FV/ (1+r)^n
year interest Bond Price
1 8% 55,361,225

b) Interest rate 8%
year coupon PV Premium interest amortization
0 55,361,225 4,638,774.58
1 3000000 56,790,123.46 3,209,876.54 4,428,898.03 (1,428,898.03)
2 3000000 58,333,333.33 1,666,666.67 4,543,209.88 (1,543,209.88)
3 3000000 60,000,000.00 - 4,666,666.67 (1,666,666.67)

c) year coupon Interest Fair Value Interest Unrealized gain


0 8% 55,361,225
1 3000000 5% 60,000,000 4,428,898.03 3,209,876.54
2 3000000 2% 65,190,990 3,000,000.00
3 3000000 60000000 1,303,819.80 -
total exp

3,000,000.00
3,000,000.00
3,000,000.00

Total exp

7,638,774.58
3,000,000.00
1,303,819.80

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