On 1st January 20X2, Bailey plc leased a machine under a four-year lease with four annual lease payments of £25,000 made on 31st Dec of each year. The lease has an implicit annual interest rate of 8%. What amount will appear under current liabilities in respect of this lease in the statement of financial position of Bailey plc as at 31st December 20X2?   a. £21,433 b. £20,408 c. £19,846 d. £25,000 e. £44,582

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.