On 1 October 2014, Fresh Company acquired an item of plant under a five-year lease agreement. At that date, the present value of the total lease payments was $25m. The agreement had an implicit finance cost of 10% per annum and required an immediate deposit of $2m and annual rentals of $6m paid on 30 September each year for five years. What is the current liability of the lease in Fresh Company's statement of financial position as at 30 September 2015?

On 1 October 2014, Fresh Company acquired an item of plant under a five-year lease agreement. At that date, the present value of the total lease payments was $25m. The agreement had an implicit finance cost of 10% per annum and required an immediate deposit of $2m and annual rentals of $6m paid on 30 September each year for five years. What is the current liability of the lease in Fresh Company's statement of financial position as at 30 September 2015?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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