Alto Leases a car on 1st Jan 2020 for 2 years Option to extend 1 more year (reasonably certain to exercise) Useful life 10 years Lease payments $10,000/ year for 2 years Lease payment $15,000 for extension (1 year) Direct costs of $3,000 Interest rate is 5% All payments are due at the end of the year 

Determine initial carrying amount asset and liability