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on 1 jan 2019 nacoh ltd hired a machine under a four lease year. a deposit...

on 1 jan 2019 nacoh ltd hired a machine under a four lease year. a deposit of 700000 was payable on the commencement of the lease on 1 jan 2019. a further 3 installment of 700000 are payable annually in advance. the present value of the future lease payment is 1871000. the rate implicit in 5he lease is 6% . what is the amount that will appear under the non current liabilities in repect of this lease inthe statement of financial position as at 31 decenber 2019

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Answer #1

The Total lease liability on 1st jan/2019: 1871000

On 31st dec/2019. Interest @ 6%

Lease Liability Sheet
Date Lease Liability Interest @6% Installement Payment Closing Lease Liability
1Jan/2019 1871000 - - 1871000
31Dec/2019 1871000 112260 (700000) 1283260
31Dec/2020 1283260 76996 (700000) 660256
31Dec/2021 660256 39743 (700000) -

So, the Total lease libility on 31DEc/2019 is 1283260.

Current Lease liability: 1283260-660256= 623004/-

And Non Current Lease libility Will be: 660256

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