Question

jadara university
faculty of business
year: 2024/2025
faculty of business
2020 بداية الدراسة المستقبلية المعالجة: المطلوب: بيان
2.487 million السترة الحالية المقارنة بفصل البنوك السنوية بتنوع بنك
10,000 بنك يتبع كل نهضة.
وسائل القيمة المضافة: 8% و%8 إحتراض الإضافي على الفائدة
سوات 4 لمدة المدة المدة الـ باستئجار كرسي
(10 علامات) السؤال الثاني: a2, b2, c1

Explanation:

Step1: Define given variables

Annual rent payment \( R = 10,000 \) dinars, number of periods \( n = 4 \), implicit interest rate \( i = 8\% = 0.08 \), present value factor \( PVIFA_{8\%,4} = 2.487 \)

Step2: Calculate initial lease liability

Lease liability = Annual payment × PVIFA
\( \text{Lease Liability} = 10,000 \times 2.487 \)

Step3: Prepare 2020 amortization schedule

Substep3a: 2020 Interest expense

Interest = Opening liability × 0.08
\( 24,870 \times 0.08 = 1,989.6 \)

Substep3b: 2020 Principal reduction

Principal = Payment - Interest
\( 10,000 - 1,989.6 = 8,010.4 \)

Substep3c: 2020 Closing liability

Closing = Opening - Principal
\( 24,870 - 8,010.4 = 16,859.6 \)

Answer:

2020 Lease Amortization & Accounting Treatment

Item	Amount (Dinars)
2020 Interest Expense	1,989.6
2020 Principal Repayment	8,010.4
Closing Lease Liability (31/12/2020)	16,859.6

Journal Entries for 2020:

1. At Lease Inception (1/1/2020):

• Dr. Right-of-Use Asset 24,870
• Cr. Lease Liability 24,870

1. At Year-End (31/12/2020):

• Dr. Interest Expense 1,989.6
• Dr. Lease Liability 8,010.4
• Cr. Cash 10,000

1. Annual Depreciation (straight-line, 4 years):

• Dr. Depreciation Expense 6,217.5
• Cr. Accumulated Depreciation - Right-of-Use Asset 6,217.5

Calculation: \( \frac{24,870}{4} = 6,217.5 \)