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Owing to low liquidity, Lisa Ltd decides on 1 July 2015 to sell its land and buildings toAnderson Ltd. The carrying values of the land and buildings...
Owing to low liquidity, Lisa Ltd decides on 1 July 2015 to sell its land and buildings toAnderson Ltd. The carrying values of the land and buildings in the books of Lisa Ltd, at 1July 2015, are:Immediately following the sale, Lisa Ltd decides to lease back the land and buildings fromAnderson Ltd. The term of the lease is 20 years. The implicit interest rate in the lease is 12per cent. It is expected that the buildings will be demolished at the end of the lease term. Thelease is non-cancellable, returns the land and buildings to Anderson Ltd at the end of thelease, and requires the following lease payments:There is no residual payment required.REQUIRED(a) Provide the entries for the sale and leaseback in the books of Lisa Ltd as at 1 July 2015.(b) Provide the entries for the purchase and lease in the books of Anderson Ltd as at 1 July2015.(c) Provide the entries in the books of Lisa Ltd as at 30 June 2025.(d) Provide the entries in the books of Anderson Ltd as at 30 June 2025.
