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19 On 1 July 20X4, Paul Ltd (the lessee) and Dean Ltd (the lessor) enter into a finance lease agreement with the following terms: lease
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On 1 July 20X4, Paul Ltd (the lessee) and Dean Ltd (the lessor) enter into a finance lease agreement with the following terms: lease term is 3 years; estimated economic life of the leased asset is 6 years, zero scrap value; 3 annual rental payments of $23,000; each payment is made one year in arrears; bargain purchase option (which Paul intends to exercise) of $3,235 at the end of the lease term; interest rate implicit in the lease is 7% per annum; straight line depreciation of assets is used. What is the carrying amount (net book value) of the leased asset Paul Ltd records on its balance sheet on 30 June 20X5? Select one: a. $49,804 b. $19,891 c. $52,500 d. $63,000 e. $60,359Step by Step Solution
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