On 1st of January 2019, Sohar SAOG and Salalah SAOC entered into a lease agreement. In the contract, Sohar will lease out a delivery truck to Salalah SAOC to be used in transporting Salalah goods to Sohar. The lease has a 5-year term where Salalah has to make an annual lease payment of OMR 7,000 to Sohar at the beginning of each year. The fair value of the delivery truck is OMR 25,000 and has estimated life of 10 years. The present value of minimum lease payments is OMR 31,255 and the rate of interest in the lease is 6%. Please answer the following questions pertaining to Salalah SAOC (lessee): Questions No. 29, 30 and 31 How much will be the accrued interest on 31 December 2019? a. OMR 2,000 b. OMR 1,080 c. OMR 1,500 d. OMR 1,440

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On 1st of January 2019, Sohar SAOG and Salalah SAOC entered into a lease agreement. In the contract, Sohar will lease out a delivery truck to Salalah SAOC to be used in transporting Salalah goods to Sohar. The lease has a 5-year term where Salalah has to make an annual lease payment of OMR 7,000 to Sohar at the beginning of each year. The fair value of the delivery truck is OMR 25,000 and has estimated life of 10 years. The present value of minimum lease payments is OMR 31,255 and the rate of interest in the lease is 6%. Please answer the following questions pertaining to Salalah SAOC (lessee): Questions No. 29, 30 and 31 How much will be the accrued interest on 31 December 2019? a. OMR 2,000 b. OMR 1,080 c. OMR 1,500 d. OMR 1,440
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