Question

X Ltd. acquired a lease for 5 years on 1st April, 2008 at a cost of Rs. 30,000. It was decided to depreciate it under the annuity method at 5% interest. Annuity table shows that at 5%, Re. 1 over 5 years is equivalent to Re. 0.230975.

Write up the Lease A/c and Depreciation A/c for 5 years ending 31.03.2013.

Answer 1

Calculation of Depreciation

= 30,000 × 0.230975

= 6929.25

Depreciation A/C