Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On 1 October 2019, Conston Ltd (which prepares accounts to 30 September) leases an asset to a lessee. The lease term is five years and
On 1 October 2019, Conston Ltd (which prepares accounts to 30 September) leases an asset to a lessee. The lease term is five years and the lessee is required to make lease payments of 27,500 each on 1 October 2019, 2020, 2021, 2022 and 2023. The fair value of the on 1 October 2019 is 112,500. Conston Ltd incurs initial direct costs of 430 and the rate of interest implicit in the lease is 12.5%. At the end of the lease term, ownership of the expected to have come to the end of its economic life asset will remain with Conston Ltd, by which time the asset and to have a scrap value of 5,000. The net investment in the lease at commencement is (1) [ Select ] and the carrying amount of the net investment in the lease at 30 September 2020 will be (2) [ Select ].
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started