Question

Question 36

Commander Ltd leased a ship to Shepard Ltd. The ship was leased for a term of 5 years. On the day before the lease commencing, Commander Ltd had bought the ship for $15 000 000. The legal fees incurred by Commander Ltd to draw up the lease agreement amounted to $1 000 000. Assuming that the lease is a finance lease, what is the amount of the lease receivable that Commander Ltd should recognise at the start of the lease? $16 000 000 $15 100 000 $14 000 000 $15 000 000

Question 37

Commander Ltd leased a ship to Shepard Ltd. The ship was leased for a term of 5 years. On the day before the lease commencing, Commander Ltd had bought the ship for $15 000 000. The legal fees incurred by Commander Ltd to draw up the lease agreement amounted to $1 000 000. Assuming that the lease is a finance lease, what is the amount of the lease receivable that Commander Ltd should recognise at the start of the lease? $16 000 000 $15 100 000 $14 000 000 $15 000 000

Answer 1

Answer 36 & 37
Lease Receivable is the amount which a lessor expect to be received minimum over the lease term.
Lease receivable normally calculated based on agreed lease payment to be receive during lease period
after discounting the same. Which is normally called as Minumul Lease Payment from lessee point of view also.
So understanding the above, we can say whatever Lease regular payment to be finalised will also considered
each and every expenses. So capital cost plus legal expenses both shall be considered to determine Lease
Receivable. Therefore Lease Receivable is (15000000+1000000) $ 1,60,00,000. So first option is correct.