Cobalt Ltd Owns an Item of Machinery That Has a Cost

question 34

Multiple Choice

Cobalt Ltd owns an item of machinery that has a cost of $700,000 and accumulated depreciation of $200,000 as at 1 July 2003.On that date the machine is sold to Blue Ltd for $533,493,and then leased back over 8 years (the remaining life of the machine) .The lease is non-cancellable.The lease payments are $100,000 per annum,payable in arrears on 30 June each year.The interest rate implicit in the lease is 10 per cent and the economic benefits of the asset are expected to be realised evenly over its life.What are the entries to record the transactions in Blue's books on 1 July 2003 and 30 June 2004 (rounded to the nearest dollar) ?

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Definitions:

Helplessness

A state of being unable to prevent or avoid negative outcomes, often leading to a lack of effort or motivation.

Post-Traumatic Stress Disorder

A psychiatric disorder that can occur in people who have experienced or witnessed a traumatic event, such as a natural disaster, a serious accident, a terrorist act, war/combat, or rape or who have been threatened with death, sexual violence, or serious injury.

Intimate Partner Violence

Aggression toward those who are in close relationships to the aggressor.

Single People

Individuals who are not currently in a marital or committed romantic relationship, often focusing on personal, social, or career aspects of life independently.