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On 1 February 2022, Ntshenge Ltd entered into a lease for delivery vehicle for five years. Lease payments are R 50,000 per annum during
On 1 February 2022, Ntshenge Ltd entered into a lease for delivery vehicle for five years. Lease payments are R 50,000 per annum during the lease term period, all payable at the beginning of each year starting 1 February 2022. To obtain the lease, Ntshenge incurred R 20,000 in legal fees to conclude the contract. The lessee's incremental borrowing rate and lessor's interest rate implicit in the lease is 12% and 15% respectively. Additional information: The economic useful life of the delivery vehicle is 4 years. The market related prime rate at South African Reserve Bank is 10%. The initial value of right of use: delivery vehicle on 1 February 2022 is? A. R171 867 B. R270 000 O CR212 749 OD. R192 749
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