Gentle Ltd leases manufacturing equipment from Soft Ltd. The lease is non-cancellable, and Gentle Ltd has the right to purchase the equipment at the end of the lease term for $50,000. Which of the following statements is true?Gentle Ltd is the lessor of the equipment.Gentle Ltd controls the equipment but does not have legal ownership of the equipment.Gentle Ltd does not have control over the equipment.Gentle Ltd has legal ownership of the equipment.

Small Ltd signed a 3-year contract with Big Ltd for the use of a machinery on 1 July 2022 with the option to purchase the machinery at the end of the lease term. It is reasonably expected that Small Ltd will exercise the bargain purchase option. The leased machinery meets the criteria of a leased asset in accordance with AASB16 Leases. The following information shows the lease terms: Lease term (non-cancellable):3 years. Expected useful life of the machinery:8 years. Expected residual value of the machinery:$5,000. Residual value guaranteed:$40 000. Expected fair value of the machinery at the end of lease term:$50 000. Bargain purchase price at the end of lease term:$60 000. Net initial directly attributable costs (paid at 1 July 2022):$10 000. Initial lease payment (paid at 1 July 2022):$30 000. Annual lease payment (paid in arrears at 30 June):$80 000. Annual maintenance & insurance included in the annual lease payment:$10 000. Interest rate implicit in the lease:10% p.a. Required: How much initial lease liability that Small Ltd. should recognise on 1 July 2022 (rounded to the nearest dollar) in accordance with the requirements of AASB 16 Leases?

ABC Ltd signed a 4-year contract with Comp Ltd for the use of a customised machinery on 1 July 2022.ABC Ltd intends to return the asset at the end of the lease term. The leased machinery meets the criteria of a leased asset in accordance with AASB16 Leases. The following information shows the lease terms: Lease term (non-cancellable)4 yearsExpected useful life of the machinery6 yearsExpected fair value of the machinery at the end of lease term$30 000Residual value guaranteed$50 000Bargain purchase price at the end of lease term$60 000Net initial directly attributable costs (paid at 1 July 2022)$8 000Annual lease payment (paid in arrears) $70 000Interest rate implicit in the lease10% p.a. Required:Which journal entries that ABC needs to record on 1 July 2022 in relation to the lease contract?

The information below is for both Questions 6 and 7. Small Ltd signed a 3-year contract with Big Ltd for the use of a machinery on 1 July 2022 with the option to purchase the machinery at the end of the lease term. It is reasonably expected that Small Ltd will exercise the bargain purchase option. The leased machinery meets the criteria of a leased asset in accordance with AASB16 Leases. The following information shows the lease terms: Lease term (non-cancellable) 3 years Expected useful life of the machinery 8 years Expected residual value of the machinery $5,000 Residual value guaranteed $40 000 Expected fair value of the machinery at the end of lease term $50 000 Bargain purchase price at the end of lease term $60 000 Net initial directly attributable costs (paid at 1 July 2022) $10 000 Initial lease payment (paid at 1 July 2022) $30 000 Annual lease payment (paid in arrears at 30 June) $80 000 Annual maintenance & insurance included in the annual lease payment $10 000 Interest rate implicit in the lease 10% p.a. Required: How much initial lease liability that Small Ltd. should recognise on 1 July 2022 (rounded to the nearest dollar) in accordance with the requirements of AASB 16 Leases?

In a finance lease, the lessor acquires which of the following in connection with the terms of the lease?Multiple choice question.Neither title to the goods nor the right to their possession or useTitle to the goods or the right to their possession or useThe right to possession and use of the goods onlyTitle to the goods only

ABC Ltd signed a 4-year contract with Comp Ltd for the use of a customised machinery on 1 July 2022.ABC Ltd intends to return the asset at the end of the lease term. The leased machinery meets the criteria of a leased asset in accordance with AASB16 Leases. The following information shows the lease terms: Lease term (non-cancellable):4 years; Expected useful life of the machinery:6 years; Expected fair value of the machinery at the end of lease term:$30 000; Residual value guaranteed:$50 000; Bargain purchase price at the end of lease term:$60 000; Net initial directly attributable costs (paid at 1 July 2022):$8 000; Annual lease payment (paid in arrears):$70 000; Interest rate implicit in the lease:10% p.a.; What is the amount to be recorded as a Non-current Lease Liability in the books of ABC Ltd that is in accordance with AASB16 Leases on 30 June 2023?