Question

12 J لم يتم الإجابة عليه بعد 1.00 علم هذا السؤال On 31.12.2018, Salalah Corporation signed a 5-year noncancelable lease for a machine, starting January 1, 2018. Salalah's incremental borrowing rate is 10%. The cost of the asset Omr 343000. The agreement requires annual rental payments Omr 64400 at the end of each year, the amount of reduction with second annual payment is اختر أحد الخيارات a. 2786000 b. 644000 C. The correct answer not available o d. 36640 0 e. 278600 f. 36540 O

Answer 1

Answer

Workings: Year Year for discounting 1 2 3 4 5 Total 1 2 3 4 5 PV factor @10% Present Value of Min lease payments Present Value of Min lease payments 64,400 0.90909 58,545 244,126 64,400 0.82645 53,223 64,400 0.75131 48,384 64,400 0.68301 43,986 64,400 0.62092 39,987 244,126 Amortisation Schedule Repayment Schedule Annual Payment Year Interest Income 0 1 2 Reduction in Value of Min Accounts lease Receivable payments 244,126 39,987 204,139 43,986 160,153 48,385 111,768 53,223 58,545 58,545 (0) 244,127 64,400 64,400 64,400 64,400 64,400 128,800 3 24,413 20,414 16,015 11,177 5,855 4 5 Principle reduction with second payment is 43,986 Hence correct answer is option c: the correct answer is not available