On 1 January 2019, a company which prepares financial statements to 31 December each year, enters into a 3-year lease of a machine. The company incurs initial direct costs of £375 and is required to make three lease payments of £12,500 each. These payments fall due on 1 January 2019, 2020 and 2021. The rate of interest implicit in the lease is 15% per annum. The right-of-use asset should be initially measured at (in case of rounding up, please use the value closer to your calculations): O a. £37,875 O b. £28,915 O c. £33,196 O d. £28,540
On 1 January 2019, a company which prepares financial statements to 31 December each year, enters into a 3-year lease of a machine. The company incurs initial direct costs of £375 and is required to make three lease payments of £12,500 each. These payments fall due on 1 January 2019, 2020 and 2021. The rate of interest implicit in the lease is 15% per annum. The right-of-use asset should be initially measured at (in case of rounding up, please use the value closer to your calculations): O a. £37,875 O b. £28,915 O c. £33,196 O d. £28,540
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not rely too much on chatgpt, because its answer may be wrong. Please consider it carefully and give your own answer. You can borrow ideas from gpt, but please do not believe its answer.Very very grateful!Please do not rely too much on chatgpt, because its answer may be wrong. Please consider it carefully and give your own answer. You can borrow
ideas from gpt, but please do not believe its answer.Very very grateful!
Transcribed Image Text:On 1 January 2019, a company which prepares financial statements to 31 December each year,
enters into a 3-year lease of a machine. The company incurs initial direct costs of £375 and is
required to make three lease payments of £12,500 each. These payments fall due on 1 January 2019,
2020 and 2021.
The rate of interest implicit in the lease is 15% per annum. The right-of-use asset should be initially
measured at (in case of rounding up, please use the value closer to your calculations):
O a. £37,875
O b. £28,915
O c. £33,196
O d.
£28,540
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