On 1 January 2019 CARRIBEAN Ltd entered into a lease agreement with
ESTATES Ltd, the terms of which are as follows:
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Asset to be leased is a motor vehicle with a cost of R 8 000.
The lease term is 5 years. Instalments of R 2 320 to be paid
on 31 December each year, the final instalment to be made
on 31 December 2023.
The interest rate implicit in the lease is 13.81%.
The estimated useful life of the motor vehicle is 5 years.
The estimated residual value is R 1 000.
The company's policy is to utilise the straight line method to
depreciate motor vehicles.
The applicable rate of taxation is 30%. Ignore VAT implications.
The financial year end of the company is 31 December.
REQUIRED
6.1.1 Prepare a schedule of repayments for the above lease.
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