A finance lease for 6 years has an annual payment in arrears of R24,000. The fair value of the lease at inception was R106,000. Using the sum of digits method, the liability for the lease at the end of year 2 is: Select one: a. R3 221 b. R3 461 c. R3 700 d. R3 551 Please explain how you got to the answer :)
A finance lease for 6 years has an annual payment in arrears of R24,000. The fair value of the lease at inception was R106,000. Using the sum of digits method, the liability for the lease at the end of year 2 is: Select one: a. R3 221 b. R3 461 c. R3 700 d. R3 551 Please explain how you got to the answer :)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A finance lease for 6 years has an annual payment in arrears of R24,000. The fair value of the lease at inception was
R106,000. Using the sum of digits method, the liability for the lease at the end of year 2 is:
Select one:
a. R3 221
b. R3 461
c. R3 700
d. R3 551
Please explain how you got to the answer :)
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