Question: On 1 July 2 0 X 5 , Bow Ltd leased equipment to Tie Ltd . The terms of the contract are as follows: Lease

On 1 July 20X5, Bow Ltd leased equipment to Tie Ltd. The terms of the contract are as follows:
Lease term
Economic life of the equipment
Annual lease payment, in arrears (commencing 30 June 20X6)
Fair value of the equipment at 1 July 20X5
Residual value at end of lease (not guaranteed)
Residual value at end of econtmic life
Interest rate implicit in lease
PV factor of $1 at end of one year
PV factor for annuity of $1 per year for 10 years (6%)
PV factor of annuity of $1 per year for 13 years (6%)
PV factor of $1 at end of 10 years (6%)
10 years
13 years
$2,500
$19,517
$2,000
nil
6%
0.9434
7.3601
8.8527
0.5584
The lease is non-cancellable, and at the end of the lease the equipment will be returned to Bow (lessor). The lease has been classified as a finance lease by Bow.
What is the reported amount of the current liability (rounded to the nearest whole dollar) in the balance sheet of the lessee at the end of 30 June 207 in accordance with the requirements of AASB 16 Leases?
 On 1 July 20X5, Bow Ltd leased equipment to Tie Ltd.

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