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Hello, Mike
please help me with this question from kaplanhp entered into an operating lease for a machine on 1 July 20×7 with the following terms:
– 3 yers non-cancellable lease
– 6 months rent free period from commencement
– rent of $12.000 per annum payable at $1.000 a month from 6 onwardsWhat the amount that should be charged to hp’s statment of profit or loss for the year to 31 December 20×7?
answer $5.000
i don’t get the explanation:
…As the lease was only entered into 6 months into the year, 6 months expense should be recorded. This gives an expense of $5.000….
At the rate of $1,000 per month starting after month 6 and running for the next 2.5 years, that gives a total payable of $30,000
$30,000 spread over three years is $10,000 per full year.
But we only signed the lease half way into this year so only half of $10,000 is applicable to this year = $5,000
Ok?
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