Question: On December 31, 2018, Escapee plc leased machinery from Terminator Group for an agreed-upon lease term of 3 years. Escapee agreed to make annual lease

On December 31, 2018, Escapee plc leased machinery from Terminator Group for an agreed-upon lease term of 3 years. Escapee agreed to make annual lease payments of £17,000, beginning on December 31, 2018. The expected residual value of the machinery at the end of the lease term is £9,000, though Escapee does not guarantee any residual value to Terminator. What amount will Escapee record as its lease liability on December 31, 2018, if its incremental borrowing rate is 6% and the implicit rate of the lease is unknown?

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