You are working for Big Bear SRL company and you have to record the following lease

agreement. Big Bear contracted a car under a

finance lease on 10th of January 2019 from a lease company. The value of the car is 15,000 eur before VAT. On 14th of January the
lease company sent the prepayment invoice (before the care to be delivered). According to the lease agreement, the payments will be
made in lei and the foreign exchage rate to be used is the NBR official exchange rate plus 2%. On 14th of January, the offical NBR
exchange rate was 4.45 lei /eur (usually the exchange rate is published with 4 digits; this is just an example, take it as such!). the car
was delivered on 31st of January when the NBR’s exchange rate was 4.52 lei / eur. Starting with february, Big Bear SRL pays quarterly
1,700 euro plus VAT. You’ll find all the exchange rates in the table below.

NBR Capital
Remaining exchange NBR + reimbursed Interest
No. Capital Interest Annuity capital rate 2% in lei in lei VAT Total lei
1 2 3 = prev 5* 9.29% 4 5 = prev 5 - 2 6 7 = 6* 1.02 8=2*7 9=3*7 10 = (8+9)*19% 11 = 8+9+10
0 3,000 0 3,000 12,000 4.45 4.54 13,617 0 2,587 16,204
1 586 1,114 1,700 11,414 4.65 4.74 2,778 5,285 1,532 9,595
2 640 1,060 1,700 10,774 4.43 4.52 2,892 4,789 1,460 9,141
3 700 1,000 1,700 10,075 4.32 4.41 3,082 4,408 1,423 8,914
4 765 935 1,700 9,310 4.66 4.75 3,634 4,447 1,535 9,616
5 835 865 1,700 8,475 4.45 4.54 3,792 3,924 1,466 9,182
6 913 787 1,700 7,562 4.65 4.74 4,331 3,732 1,532 9,595
7 998 702 1,700 6,564 4.43 4.52 4,509 3,173 1,460 9,141
8 1,091 609 1,700 5,473 4.32 4.41 4,805 2,686 1,423 8,914
9 1,192 508 1,700 4,281 4.66 4.75 5,665 2,416 1,535 9,616
10 1,302 398 1,700 2,979 4.65 4.74 6,177 1,886 1,532 9,595
11 1,423 277 1,700 1,556 4.43 4.52 6,432 1,250 1,460 9,141
12 1,556 144 1,700 0 4.32 4.41 6,854 636 1,423 8,914
Total 0 8,400 23,400 - - - 68,569 38,632 20,368 127,569

1
Answer:

First we have to decompose the annuity between capital reimbursed and interest. We use Goal
seek function in excel. Your teacher (me!) will show you how. The implicit interest rate is 9.29%.
you have all the required date in the table above.

First invoice, for the prepayment, before the car is recieved:

% = 404 16,204
409 3,000 euro * 4.54 lei/EUR = 13,617
4426 2,587

When the car is received, we use the exchange rate published by NBR for the asset and liability
recognition (Order 1802/2014; par 321)

2133 „Vehicles” = 167 „Other long term loans” 15.000 EUR * 4.52 lei/EUR = 67,800

We settle the prepayment:

% =409 3,000 euro * 4.54
167 3,000 euro * 4.52
668 ` 3,000 euro * (4.54 - 4.52)

We use 668 and 768 as we pay in lei, but from converting from a foreign exchange rate. When we
pay directly in foreign exchange, we use 665 and 765.

For the first prepayment, we record:

% = 404 „NCA suppliers” 9,595 lei (1,700 EUR * 1.19 * 4.74 lei/EUR)
167″ Other long term loans” 2,778 lei (586 EUR * 4.74 lei / EUR)
666″Interest expenses” 5,285 lei (1,114 EUR* 4.74 lei/EUR)
4426″Input VAT” 1,532 lei

And, if the deduction reight is limited, immediatly:

635 „Cheltuieli cu alte impozite” = 4426″ Input VAT”

At the end of the month or at the end of the quarter, the amounts in 167 are restated depending
on the NBR’s exchange rate (the monetary item, included here is the loan, are presented in the
financial statements at the closing exchange rate).