On January 1, 2017, ABC Ltd entered into a 4-year lease agreement for an equipment...
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Accounting
On January 1, 2017, ABC Ltd entered into a 4-year lease agreement for an equipment costing GHC 112,000. The lease agreement requires an annual payment of GHC 20,000 to be paid at the beginning of each year. At the end of the lease term, the equipment will revert to the lessor. The equipment has an economic useful life of 4 years and has residual value. The interest rate is 10%. Required a. What type of lease arrangement is described above? b. Calculate the minimum lease payment. c. Create a lease amortization schedule for the above transaction.
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