On 1 October 20X3, Fresco acquired an item of plant under a five-year finance lease agreement. The plant had a cash purchase cost of $25 million. The agreement had an implicit finance cost of 10% per annum and required an immediate deposit of $2 million and annual rentals of $6 million paid on 30 September each year for five years. What would be the current liability for the leased plant in Fresco's statement of financial position as at 30 September 20X4? A $19,300,000 B $4,070,000 C $5,000,000 D $3,850,000

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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On 1 October 20X3, Fresco acquired an item of plant under a five-year finance lease agreement. The plant had

a cash purchase cost of $25 million. The agreement had an implicit finance cost of 10% per annum and

required an immediate deposit of $2 million and annual rentals of $6 million paid on 30 September each year

for five years.

What would be the current liability for the leased plant in Fresco's statement of financial position as at

30 September 20X4?

A $19,300,000

B $4,070,000

C $5,000,000

D $3,850,000

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