ACC100 Lecture Notes - Lecture 1: Deferred Income, Finance Lease, Current Liability

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16 Jan 2015
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Then prepare a revised statement of financial position. After reviewing the draft financial statement. Presented below is the analysis of my observations and suggested adjustments in relations to the transactions outlined. My revised statement of financial position then follows my detailed explanations. Adjustments needed in certain transactions and necessary journal entries. The following explanations are the deductions i made from the transactions and the adjustments needed: bank indebtedness. This transaction requires no adjustment. The 10% interest rate is bihi"s incremental borrowing rate: lease. The pv of the lease payments on 2 january 20x4 equals; ,000 (p/ad, 10%, 5) = ,000 4. 16987 = ,250. This amount should have been recorded at the inception of the lease. The following are the journal entries of necessary adjustments to correct the lease accounts; Capital lease liability1 = (,250 ,000)= 79,250. Interest expense2 = (,250 10%)= 7,925. Depreciation expense3 = (,250 5)= 20,850.

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