On 1st January 2018, Dragonland SAOG entered into an agreement to lease an item of equipment from a manufacturer for 6 years. The lease requires five annual payments of RO 50,000 each commencing from 1st January 2018. The equipment would have a useful life of six years and with no residual value. The present value of the total lease payments is OMR 240,000. The cost of capital used is 14% find the interest to be charged to the income statement and the depreciation on the leased equipment for the year ended 31st December 2018. Interest charges OMR 26,600 depreciation OMR 48,000 Interest charges OMR 33,600 depreciation OMR 48,000 None of them Interest charges OMR 26,600 depreciation OMR 40,000

On 1st January 2018, Dragonland SAOG entered into an agreement to lease an item of equipment from a manufacturer for 6 years. The lease requires five annual payments of RO 50,000 each commencing from 1st January 2018. The equipment would have a useful life of six years and with no residual value. The present value of the total lease payments is OMR 240,000. The cost of capital used is 14% find the interest to be charged to the income statement and the depreciation on the leased equipment for the year ended 31st December 2018. Interest charges OMR 26,600 depreciation OMR 48,000 Interest charges OMR 33,600 depreciation OMR 48,000 None of them Interest charges OMR 26,600 depreciation OMR 40,000

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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