Page 151 - F2 Integrated Workbook STUDENT 2019
P. 151
Leases
Example 6.3
On 1 April 20X7, Sima entered into an agreement to lease an item of
equipment. The lease required four annual payments in advance of $215,000
each commencing on 1 April 20X7. The equipment has a useful life of four
years and will be scrapped at the end of the lease period. The present value of
the total lease payments is $750,000 and the interest rate implicit in the lease is
10%.
How will this be reflected within the financial statements of Sima for the
year ended 31 March 20X8?
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