[joelstanlee]

Dr. Cash (Sale amount) 70,000
Dr. Right of Use asset (Carrying value * % of right retained) 17,144
Dr. Loss (Initial loss * % of right transferred) 7,857
Cr. Non-Current Asset (Note 1) 80,000
Cr. Lease Liability (PV of future payments – value provided in question) 15,000

Note 1: Calculating the carrying value of the asset

Value on 1/1/XXX1 100,000
Less: Depreciation (Value of the asset on 1.1.XXX3/ Useful life of the asset) = 20,000
Carrying value of the asset = 80,000
Initial Loss = 10,000

Note 2: Calculation of percentage of right retained & right transferred

Present Value (already provided in question) = 15,000
Sale Price = 70,000
Percentage of Right Retained (PV/Sale Price*100) = 21.43
Percentage of Right Transferred (100 – % of right retained) = 78.57

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