On 1 January 2021 Linguine plc acquires a new machine under a leasing arrangement. The terms are: An Initial payment of £13,760, payable immediately on 1 January 2021 4 further annual payments of £20,000, starting 1 January 2022 The interest rate charged by the lessor is 8% The asset has a life of 5 years Calculate the following balances to present in Linguine's financial statements for the year ended 31 December 2021 (i) The carrying amount of the right of use asset (ii) Current lease liability (iii0 Non-current lease liability
On 1 January 2021 Linguine plc acquires a new machine under a leasing arrangement. The terms are: An Initial payment of £13,760, payable immediately on 1 January 2021 4 further annual payments of £20,000, starting 1 January 2022 The interest rate charged by the lessor is 8% The asset has a life of 5 years Calculate the following balances to present in Linguine's financial statements for the year ended 31 December 2021 (i) The carrying amount of the right of use asset (ii) Current lease liability (iii0 Non-current lease liability
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On 1 January 2021 Linguine plc acquires a new machine under a leasing arrangement.
The terms are:
An Initial payment of £13,760, payable immediately on 1 January 2021
4 further annual payments of £20,000, starting 1 January 2022
The interest rate charged by the lessor is 8%
The asset has a life of 5 years
Calculate the following balances to present in Linguine's financial statements for the
year ended 31 December 2021
(i) The carrying amount of the right of use asset
(ii) Current lease liability
(iii0 Non-current lease liability
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