Question 13 On 1 January 2023 Fellini Co entered into a contract for the right to use a machine for a four-year period. The contract meets the definition of a lease under IFRS 16 Leases. Fellini Co paid a deposit of £700,000 on the commencement of the lease on 1 January 2023 and a further 3 instalments of £700,000 are payable annually in advance. The present value of the future lease payments was £1,871,100 on commencement of the lease. The interest rate implicit in the lease is 6%. Required: What amount will appear under non-current liabilities in respect of this lease in the statement of financial position of Fellini Co at 31 December 2023?
Question 13 On 1 January 2023 Fellini Co entered into a contract for the right to use a machine for a four-year period. The contract meets the definition of a lease under IFRS 16 Leases. Fellini Co paid a deposit of £700,000 on the commencement of the lease on 1 January 2023 and a further 3 instalments of £700,000 are payable annually in advance. The present value of the future lease payments was £1,871,100 on commencement of the lease. The interest rate implicit in the lease is 6%. Required: What amount will appear under non-current liabilities in respect of this lease in the statement of financial position of Fellini Co at 31 December 2023?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
q 13
Transcribed Image Text:Question 13
On 1 January 2023 Fellini Co entered into a contract for the right to use a machine for a
four-year period. The contract meets the definition of a lease under IFRS 16 Leases. Fellini
Co paid a deposit of £700,000 on the commencement of the lease on 1 January 2023 and
a further 3 instalments of £700,000 are payable annually in advance. The present value
of the future lease payments was £1,871,100 on commencement of the lease. The interest
rate implicit in the lease is 6%.
Required:
What amount will appear under non-current liabilities in respect of this lease in the
statement of financial position of Fellini Co at 31 December 2023?
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education