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    E21.4 (LO 2, 4) (Lessee Entries, Unguaranteed Residual Value) Assume That On

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    Warmthx
    The document describes a 10-year lease agreement between Stora Enso and Sheffield Storage for a storage building. It provides details on the annual rental payments, fair value and estimated life of the building, guaranteed and expected residual values. The summary should include the key elements of the lease such as: - Stora Enso leases a storage building from Sheffield Storage for 10 years with annual rental payments of €71,830 - The building has a fair value of €525,176 and estimated life of 12 years - Stora Enso would record an initial right-of-use asset of €521,934 and lease liability of €521,934 on its books for the lease.

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    E21.4 (LO 2, 4) (Lessee Entries, Unguaranteed Residual Value) Assume That On

    Uploaded by

    Warmthx
    2K views3 pages
    The document describes a 10-year lease agreement between Stora Enso and Sheffield Storage for a storage building. It provides details on the annual rental payments, fair value and estimated life of the building, guaranteed and expected residual values. The summary should include the key elements of the lease such as: - Stora Enso leases a storage building from Sheffield Storage for 10 years with annual rental payments of €71,830 - The building has a fair value of €525,176 and estimated life of 12 years - Stora Enso would record an initial right-of-use asset of €521,934 and lease liability of €521,934 on its books for the lease.

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    E21

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    The document describes a 10-year lease agreement between Stora Enso and Sheffield Storage for a storage building. It provides details on the annual rental payments, fair value and estimated life of the building, guaranteed and expected residual values. The summary should include the key elements of the lease such as: - Stora Enso leases a storage building from Sheffield Storage for 10 years with annual rental payments of €71,830 - The building has a fair value of €525,176 and estimated life of 12 years - Stora Enso would record an initial right-of-use asset of €521,934 and lease liability of €521,934 on its books for the lease.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    2K views3 pages

    E21.4 (LO 2, 4) (Lessee Entries, Unguaranteed Residual Value) Assume That On

    Uploaded by

    Warmthx
    The document describes a 10-year lease agreement between Stora Enso and Sheffield Storage for a storage building. It provides details on the annual rental payments, fair value and estimated life of the building, guaranteed and expected residual values. The summary should include the key elements of the lease such as: - Stora Enso leases a storage building from Sheffield Storage for 10 years with annual rental payments of €71,830 - The building has a fair value of €525,176 and estimated life of 12 years - Stora Enso would record an initial right-of-use asset of €521,934 and lease liability of €521,934 on its books for the lease.

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    E21.

    4 (LO 2, 4) (Lessee Entries, Unguaranteed Residual Value) Assume that on


    December 31, 2021, Stora Enso (FIN) signs a 10-year, non-cancelable lease agreement to
    lease a storage building from Sheffield Storage. The following information pertains to this
    lease agreement.
    1. The agreement requires equal rental payments of €71,830 beginning on December 31,
    2021.
    2. The fair value of the building on December 31, 2021, is €525,176.
    3. The building has an estimated economic life of 12 years, a guaranteed residual value
    of €10,000, and an expected residual value of €7,000. Stora Enso depreciates similar
    buildings using the straight-line method.
    4. The lease is non-renewable. At the termination of the lease, the building reverts to the
    lessor.
    5. Stora Enso’s incremental borrowing rate is 8% per year. The lessor’s implicit rate is
    not known by Stora Enso.
    Instructions
    a. Prepare the journal entries on the lessee’s books to reflect the signing of the lease
    agreement and to record the payments and expenses related to this lease for the years
    2021, 2022, and 2023. Stora Enso’s fiscal year-end is December 31.
    b. Use the same facts as above, except that Stora Enso incurred legal fees of €5,000
    resulting from the execution of the lease, and received a lease incentive of €1,000
    from Sheffield to enter the lease. How would the initial measurement of the lease
    liability and right-of-use asset be affected under this situation?
    c. Suppose that in addition to the €71,830 annual rental payments, Stora Enso is also
    required to pay €5,000 annually for insurance costs on the building directly to the
    lessor, Sheffield Storage. How would this executory cost affect the initial
    measurement of the lease liability and right-of-use asset?
    d. Return to the original facts in the problem. Now suppose that, at the end of the lease
    term, Stora Enso has taken good care of the asset and Sheffield agrees that the fair
    value of the asset is actually €10,000. Record the entry for Stora Enso at the end of
    the lease to return the storage building to Sheffield (assuming the accrual of interest
    on the lease liability has already been made).

    JAWAB :
    a. Untuk tujuan menghitung liabilitas sewa awal, nilai saat ini dari pembayaran sewa hanya
    akan meliputi jumlah jaminan nilai sisa yang mungkin terutang di akhir masa sewa. Dengan
    demikian, kewajiban sewa awal dan aset hak pakai yang akan dicatat pada pembukuan Stora
    Enso dihitung sebagai berikut:

    Annual Rental Payment €71,830 Probable residual value €3,000


    PV (i=8%, n=10) 7.24689 x PV faktor (i=8%, n=10) 0.46319 x
    520,544 1,390
    *€520,544 + €1,390 = €521,934

    12/12/2021
    Right of use asset €521,934
    Lease liability €521,934
    Kewajiban sewa €71,830
    Kas €71,830

    Stora Enso
    Jadwal Amortisasi Sewa
    (Penyewa)

    Pembayaran Pengurangan Kewajiban


    Tanggal Bunga (5%)
    sewa Tahunan kewajiban sewa sewa
    12/31/2021 - - - 521,934
    12/31/2021 71,830 - 71,830 450,104
    12/31/2022 71,830 36,008 35,822 450,104
    12/31/2023 71,830 33,143 38,687 375,595

    12/31/2021
    Beban Penyusutan (521,934 : 10) €52,193
    Right of use asset €52,193
    Kewajiban Sewa €35,822
    Beban Bunga €36,008
    Kas €71,830
    12/31/2023
    Beban Penyusutan (521,934 : 10) €52,193
    Right of use asset €52,193
    Kewajiban Sewa €38,687
    Beban Bunga €33,143
    Kas €71,830

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