• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • FIA Forums
  • CIMA Forums
  • OBU Forums
  • Qualified Members forum
  • Buy/Sell Books
  • All Forums
  • Latest Topics

September 2025 ACCA Exam results

Post comments & Instant poll

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for December 2025 exams.
Get your discount code >>

Lease Question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Lease Question

  • This topic has 2 replies, 2 voices, and was last updated 5 years ago by johnmn1234.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • January 22, 2020 at 11:12 am #559436
    johnmn1234
    Member
    • Topics: 16
    • Replies: 4
    • ☆

    Dear Sir,
    In one of your question on lease as follows:
    On 1 January 2015, Plum entered into a five year lease of machinery. The machinery has a useful life of six years. The annual lease payments are $5,000 per annum, with the first payment made on 1 January 2015. To obtain the lease Plum incurs initial direct costs of $1,000 in relation to the arrangement of the lease but the lessor agrees to reimburse Pear $500 towards the costs of the lease.
    The rate implicit in the lease is 5%. The present value of the minimum lease payments is $22,730.
    Demonstrate how the lease will be accounted in the financial statements over the five year period.

    How were you able to obtain minimum lease payments of $22730 as $5000 x 4.325 = $21625.

    Thanks

    January 27, 2020 at 8:50 pm #560006
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7205
    • ☆☆☆☆☆

    Hi,

    The 4.325 is the annuity factor for the length of the lease at 5%. The annuity factor will be 1 + AF 1-5 @ 5%.

    Thanks

    February 1, 2020 at 5:35 pm #560392
    johnmn1234
    Member
    • Topics: 16
    • Replies: 4
    • ☆

    Thank you Sir

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • M.Kagi on MA Chapter 1 Questions Accounting for Management
  • HarryB on Throughput accounting – ACCA Performance Management (PM)
  • babysnow88 on Revenue Recognition Specifics – ACCA SBR
  • belz92 on MA Chapter 4 Questions Cost Classification and Behaviour
  • StudyWithAqeel on MA Chapter 5 Questions Ordering and Accounting for Inventory

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in