What is amount that would be recognised by Lessee Ltd

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Reference no: EM132633980

Question - On 1 July 20X1 Lessee Ltd leased some equipment from Lessor Ltd. The details of the lease arrangement are as follows:

The lease term was for 3 years

The interest rate implicit in the arrangement was 10%

The lessee paid an amount of $38,000 per annum to the lessor commencing on 1 July 20X1

The residual value at the end of the lease term was $24,000 of this, an amount of $17,000 was guaranteed by the lessee

$2,000 is the amount of the residual value guarantee that was expected to be payable by the lessee to the lessor at the end of the lease term

The lessee paid initial direct costs of $1,636 at the commencement of the lease

The leased asset will be returned to the lessor at the end of the lease term

Required - What is amount that would be recognised by Lessee Ltd as the Right of Use Asset at the commencement of the lease?

Reference no: EM132633980

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