0444 Assignment No 2 Solution 2022-Autumn AIOU-Q 2 Ans-Advance Accounting
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Question no 2
A Car was acquired on leases by Affan from Azan Corporation for four
years on 1st January, 2021 that has fair value of Rs. 15,000. Interest rate implicit in the lease is 12%. Useful life of equipment is 5 years. Annual rentals are payable at the end of each year. The lessee depreciates the asset using the straight-line method. (20)
Required:
i. Compute the annual rentals payable.
ii. Prepare amortization schedule
iii. Prepare the journal entries for the first two years in the books of lessee.
