The Following Information Relates to a Lease Between Canneries Limited

question 11

Multiple Choice

The following information relates to a lease between Canneries Limited (lessor) and Fruiterers Limited (lessee) .3 lease payments of $20 000 each are made annually in advance and a final lease payment of $15 000 is made at the end of the 3 year lease term.The implicit interest rate is 10%.The amount of the interest expense that is recognised when the second payment of the lease is paid is:

• A)$4598.
• B)$6598.
• C)$7500.
• D)$15 402.

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Definitions:

Analytical Skills

The ability to analyze information, break it down into smaller parts, identify patterns, and solve problems logically.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value to an organization.

Same Values

The shared beliefs or ethical standards that guide a group of individuals or an organization's behavior and decision-making processes.

Human Capital Inimitability

The degree to which the skills and talents of employees can be emulated by other organizations.