Magnificant Retailor enters into a five-year lease agreement with Mega Shopping Centres plc to lease a small shop at £50,000 per annum payable at the start of each year. Assume the relevant interest rate is 10% per annum.
Required:
Compute the carrying value of the asset and liability in the financial statements at the end of each year assuming the lease is accounted for as a Type B lease under the 2013 exposure draft.