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Calculate the right-of-use asset as at January

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Reference no: EM133055407

Question - James Anderson Ltd. enters into a four (4) year lease commencing on January 1, 20X1 (and intends to use the asset for 4 years. The terms are 4 payments of $50,000, commencing on January 1, 20X1, and annually thereafter. The interest rate implicit in the lease is 7.5% and the present value of lease payments not paid at January 1, 20X1 (i.e. 3 payments of $50,000) discounted at that rate is $130,026. Legal costs to set up the lease incurred by the company were $402.

Required -

-Show the lease liability for each of the four years of the lease i.e. Year-end December 31, 20X1 to December 31, 20X4.

-Calculate the right-of-use asset as at January 1, 20X1.

-Calculate the annual depreciation.

Reference no: EM133055407

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