On 1st January 2015, Trademart SAOG entered into an agreement to lease an item of plant from a manufacturer for 5 years. The lease requires five annual payments of RO 200,000 each commencing from 1st January 2016. The plant would have a useful life of five years and with no residual value. The present value of the total lease payments is OMR 840,000. The cost of capital used is 12% find the initial amount of lease liability right to use asset recognition in the first year in the boaks of lessee. ion Lease liability OMR 640,000 and right to use asset OMR 840,000 None of them Lease liability OMR 840,000 and right to use asset OMR 840,000 Lease liability OMR 640,000 and right to use asset OMR 640,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On 1st January 2015, Trademart SAOG entered into an agreement to lease an item of plant from a manufacturer for 5 years. The
lease requires five annual payments of RO 200,000 each commencing from 1st January 2016. The plant would have a useful life of
five years and with no residual value. The present value of the total lease payments is OMR 840,000. The cost of capital used is
12% find the initial amount of lease liability right to use asset recognition in the first year in the boaks of lessee.
ion
Lease liability OMR 640,000 and right to use asset OMR 840,000
None of them
Lease liability OMR 840,000 and right to use asset OMR 840,000
Lease liability OMR 640,000 and right to use asset OMR 640,000
Transcribed Image Text:On 1st January 2015, Trademart SAOG entered into an agreement to lease an item of plant from a manufacturer for 5 years. The lease requires five annual payments of RO 200,000 each commencing from 1st January 2016. The plant would have a useful life of five years and with no residual value. The present value of the total lease payments is OMR 840,000. The cost of capital used is 12% find the initial amount of lease liability right to use asset recognition in the first year in the boaks of lessee. ion Lease liability OMR 640,000 and right to use asset OMR 840,000 None of them Lease liability OMR 840,000 and right to use asset OMR 840,000 Lease liability OMR 640,000 and right to use asset OMR 640,000
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