Reference no: EM132570342

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 4 years
• The interest rate implicit in the arrangement was 10%
• The lessee paid an amount of $48,000 per annum to the lessor commencing on 1 July 20X1
• The residual value at the end of the lease term was $23,000 of this, an amount of $17,000 was guaranteed by the lessee $3,000 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 $1,783 at the commencement of the lease
• The leased asset will be returned to the lessor at the end of the lease term

Question 1: Write the amount that would be recognised by Lessee Ltd as the Right of Use Asset at the commencement of the lease in accordance with the requirements of AASB 16