Problem 1 At the beginning of the current year, an entity leased an equipment from a lessor with the following p information: Annual rental payable at the end of each year Initial direct cost paid Lease bonus paid to lessor before commencement of the lease 1,000,000 400,000 300,000 100,000 700,000 200,000 500,000 5 years 8 years Lease incentive received Discounted amount of restoring building as required by contract Leasehold improvement Purchase option that is reasonably certain to be exercised Lease term Useful life of building Implicit interest rate Incremental borrowing rate 10% 12% What is the initial lease liability?

Problem 1 At the beginning of the current year, an entity leased an equipment from a lessor with the following p information: Annual rental payable at the end of each year Initial direct cost paid Lease bonus paid to lessor before commencement of the lease 1,000,000 400,000 300,000 100,000 700,000 200,000 500,000 5 years 8 years Lease incentive received Discounted amount of restoring building as required by contract Leasehold improvement Purchase option that is reasonably certain to be exercised Lease term Useful life of building Implicit interest rate Incremental borrowing rate 10% 12% What is the initial lease liability?

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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