On 1 January 20X3 Rabbit acquires a new machine with an estimated useful life of 6...

 

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On 1 January 20X3 Rabbit acquires a new machine with an estimated useful life of 6 years under the following agreement: An initial payment of $13,760 will be payable immediately 5 further annual payments of $20,000 will be due, commencing 1 January 20X3 The interest rate implicit in the lease is 8% The present value of the lease payments, excluding the initial payment, is $86,240 What will be recorded in Rabbit's financial statements at 31 December 20X4 in respect of the lease liability? A. B. C. Finance cost 4,123 5,299 5,312 5,851 Non-current liability 35,662 51,539 51,712 43,709 Current liability 20,000 20,000 20,000 15,281 On 1 January 20X3 Rabbit acquires a new machine with an estimated useful life of 6 years under the following agreement: An initial payment of $13,760 will be payable immediately 5 further annual payments of $20,000 will be due, commencing 1 January 20X3 The interest rate implicit in the lease is 8% The present value of the lease payments, excluding the initial payment, is $86,240 What will be recorded in Rabbit's financial statements at 31 December 20X4 in respect of the lease liability? A. B. C. Finance cost 4,123 5,299 5,312 5,851 Non-current liability 35,662 51,539 51,712 43,709 Current liability 20,000 20,000 20,000 15,281

Answer rating: 100% (QA)

Answer A Year Balance bf lease payment 1 Payment 2 Interest 3128 Balance cf lease pay... View the full answer