What is the cost of right of use of asset?

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 10MC: On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring...
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Question 19
At the beginning of current year, Don Rashed
Company sold a building with remaining life.
of 20 years and immediately leased it back for
5 years. Sales price is 20,000,000 for an
18,000,000 fair value.
Upon reviewing the books of Don Rashed,
the carrying amount of the building per FS is
10,800,000.
The agreement consideration is 1500,000
with an implicit interest rate of 12%.
What is the cost of right of use of asset?
Transcribed Image Text:Question 19 At the beginning of current year, Don Rashed Company sold a building with remaining life. of 20 years and immediately leased it back for 5 years. Sales price is 20,000,000 for an 18,000,000 fair value. Upon reviewing the books of Don Rashed, the carrying amount of the building per FS is 10,800,000. The agreement consideration is 1500,000 with an implicit interest rate of 12%. What is the cost of right of use of asset?
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