Page 152 - F2 Integrated Workbook STUDENT 2019
P. 152
Chapter 6
Example 6.4
On 1 January 20X1, Dynamic entered into a three year lease for a lorry. Lease
payments are $10,000 per year for the first two years and $15,000 for the third
year. All payments are due at the end of the year. The present value of the
lease payments was $31,552, and Dynamic incurred initial direct costs of
$3,000. Dynamic’s rate of borrowing is 5%.
Prepare extracts from Dynamic's financial statements in respect of the
lease agreement for the year ended 31 December 20X1.
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