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On oct 13, company A acquired a plant under a 5 years lease agreement. and it requires immediate deposit of 2m with 5 payments of 6m paid annually in arrears commencing on 30th sept 14. PV of future lease payment – 22,746,000.
Agreement has implicit finance cost of 10% per annum.
What will be the CL as at 30th sept 14?
My question – What did they do with 2m ?
The 2 million forms part of the right of use asset.