Transaction/event 5: lease asset (8 marks) On 1 July 2022, Surf Ltd leases a semi-trailer...
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Transaction/event 5: lease asset (8 marks) On 1 July 2022, Surf Ltd leases a semi-trailer truck from Superior Ltd. The truck will be used to move spare parts between Surf's various warehouses. The vehicle has a fair value on the inception of the lease of $182,163. The lease agreement cost Surf Ltd $2,000 to have drawn up. The terms of the lease are as follows: Lease term 5 years 1 x Lease payment on inception $20,000 5 x Lease payment each 30 June $35,000 Useful life of the vehicle 10 years Estimated residual value at the end of the useful life $0 Payment required for purchase option in year 5 $30,000 Interest implicit in the lease 8% Surf Ltd has indicated that it will exercise the purchase option at the end of the lease. Required: a) Identify and discuss the applicable accounting standard(s) and prepare all relevant journal entries for Surf Ltd for the financial year ended 30 June 2023. b) What is Surf Ltd's the closing lease liability as at 30 June 2023? c) Advise on the following: If Superior Ltd has the right replace the truck with a different truck at any point within the 5 years
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