Specific for question 13b and c. Thank you. PART C: LeasesPlatino Bhd leases the following assets from three lessors. The assets are to be used in the propertydevelopment of the company. The details of the assets are as follows:LessorColton BhdMarisha BhdTinker BhdТуре ог аssetExcavatorTruckCraneYearly rentalRM15,000 (firstpayment on 31December 2020)RM12,000 (firstpayment on 28February 2021)RM10,000 (firstpayment on 30 June2020)1 January 2020I March 20201 July 20195 yearsInception dateLease term10 years7 yearsEstimated economic 20 years9 years10 yearslifePurchase optionRM75,000 at end of NoneNoneyear 10.Renewal optionNoneNoneNoneFair value at theRM220,000RM150,000RM55,000inception of leaseGuaranteed-0-RM15,000RM10,000residual valueEstimated residualRM90,000RM11,000RM10,000value at end of leasetermImplicit rate5%4% (13) Mr. Faizal, who just graduated in accounting, is auditing the company's financialstatements for the year ended 31 December 2020. He noticed that on 1 January 2020, thecompany entered into a leasing contract with Cloud Bhd to lease a photocopy machine. Theterms of the contract are as follows:i. The non-cancellable lease term of 5 years.ii. Lease rental of RM3,500 per year (paid on every 31 December) and commencing on31 Dec 2020.iii. Platino Bhd guarantees the residual value of RM2,500.iv. The estimated economic life of the asset is 5 years.v. The implicit rate and Platino Bhd's incremental borrowing rate is 6% per year.In the company's accounting record, only the following joumal entries for the photocopymachine are prepared for FYE 2020:Dr. Leased asset16,611Cr. Lease liability16,611Mr. Faizal asked Miss Mia, an account clerk, the reasons the company prepared suchjournal entries. Miss Mia explained that the transaction should be recognized as a financelease based on MFRS117 Leases.Required (Round the answer to the whole RM):(a) Discuss whether the leasing transaction for the photocopy machine is appropriatelyrecorded by Platino Bhd. (CTPS 1)(b) Explain whether there is any implication to Platino Bhd when the company records theleasing transaction in accordance with MFRS 117. (CTPS 2)(c) Discuss how Platino Bhd should account for the leasing transaction for the year 2020.Show the relevant calculations and journal entries, where appropriate. (CTPS 3,4)

Leasing - A lease is a legal agreement that specifies the conditions under which one party consents…

PART C: Leases Platino Bhd leases the following assets from three lessors. The assets are to be used in the property development of the company. The details of the assets are as follows: Bhd Lessor Type of asset Yearly rental Inception date Lease term Colton Excavator RM15,000 (first payment on 31 December 2020) 1 January 2020 10 years Marisha Bhd Truck RM12,000 (first payment on 28 February 2021) 1 March 2020 7 years Tinker Bhd Crane RM10,000 (first payment on 30 June 2020) 1 July 2019 5 years

PART C: Leases Platino Bhd leases the following assets from three lessors. The assets are to be used in the property development of the company. The details of the assets are as follows: Bhd Lessor Type of asset Yearly rental Inception date Lease term Colton Excavator RM15,000 (first payment on 31 December 2020) 1 January 2020 10 years Marisha Bhd Truck RM12,000 (first payment on 28 February 2021) 1 March 2020 7 years Tinker Bhd Crane RM10,000 (first payment on 30 June 2020) 1 July 2019 5 years

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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