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How much is the balance of the right-of-use asset

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Question - On December 31, 2019, Lucas Corporation leased a building from Fort Company for seven-year period expiring December 31, 2026. Equal annual payments of P2,000,000 are due on December 31 of each year, beginning with December 31, 2019. The lease is properly classified as a finance lease on Lucas 's books. At inception of the lease, Lucas paid P350,000 as commission to agent and estimated that P400,000 will be paid to restore the property at the end of lease term. The building has a useful life of 20 years at inception of the lease. Lucas guaranteed a residual value of P200,000 at the end of lease term.

Assuming all payments are made on time and the rate implicit and effective is at 12%, the amount that should be reported by Lucas Corporation as the lease liability on its December 31, 2022 financial statement is?

How much is the balance of the right-of-use asset as of December 31, 2022?

Reference no: EM133185993

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