Page 111 - SBR Integrated Workbook STUDENT S18-J19
P. 111
Leases
Example 6
Lessors – Finance leases
Pine is a lessor. On 1 January 20X1 it enters into a finance lease agreement.
The asset was classified as property, plant and equipment and carried at $2
million. The present value of the lease payments is $2.5 million. Lease
payments are $0.5 million in arrears. The interest rate implicit in the lease is
5.5%.
How will this be accounted for by Pine in the year ended on 31
December 20X1?
105
