How the leasing of the asset will be presented each year

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Case Study: Connemara Ltd expanded its business on 1 January 2020 with a new production line. The new production line required additional machinery with a cost of £543,600. Connemara has limited access to loan financing and so obtained the necessary machinery through a leasing agreement from their regular equipment supplier. The lease agreement required four annual payments in advance of £150,000 the first commencing on 1 January 2020. The plant would have a useful life of four years with no residual value at the end of this life. Connemara depreciates plant and machinery on a straight-line basis. Connemara's accounting year runs to 31st December.

Question

Show how the leasing of the asset will be presented each year in the financial statements of Connemara Ltd in accordance with IFRS 16 Leases

 

Reference no: EM133530909

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