Question
On January 1, 2020. TALA Company leases a property fromALAT Company with the following terms: Annual rent (payable every year end)220,000 Lease term5 years Purchase
On January 1, 2020. TALA Company leases a property fromALAT Company with the following terms:
Annual rent (payable every year end)220,000
Lease term5 years
Purchase option30,000
Implicit interest rate12%
Useful life of the property8 years
On January 1, 2022, it was ascertained thatTALACompany willno longer exercise the purchase option and the annual rent will be increased by 5% starting January 1, 2022.
Question:How much is the interest expenseon December 31, 2024?
Format of answer shouldbe:000,000
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Fundamental Accounting Principles Volume 1
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
15th Canadian Edition
1259259803, 978-1259259807
