Pakka Co is preparing its financial statements for the year ended 31 December 20X5. On 1 January 20X5, Pakka Co leased plant from Lamda Co. The plant is being leased for four years and the agreement requires an initial deposit of $10,000 plus four annual payments of $10,000 made on 31 December each year. The useful life of the plant is 20 years and both Pakka Co and Lamda Co depreciate plant on a straight-line basis. The interest rate implicit in the lease is 10%. Pakka Co made modifications to the leased plant before it could be used at a cost of $7,500. The plant must be restored to its original condition by Pakka Co before it is delivered back to Lamda Co. The present value of this expected cost is $2,500 The expected values of $1 at a discount rate of 10% on 31 December each year are. 20X5 $0.91 20X6 $0.83 20X7 $0.75 20X8 $0.68 The four-year cumulative discount factor is 3.17. Ignoring the recognition exemptions provided by IFRS 16 Leases, which TWO of the following statements are true? A right-of-use asset represents a lessee's right to use an underlying asset for the lease term The