What is the initial measurement of the right-of-use asset

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Question - The following facts pertain to a non-cancelable lease agreement between Angels Company and Astros Company commencing on January 1, 2019:

Annual rentals due starting on January 1, 2019 315,000

Purchase option price at the end of the lease term 15,000

Lease term 6 years

Economic life of the lease equipment 8 years

Initial direct costs 60,000

The implicit rate of the lease which was readily determinable by Angels Company was 11%. Angels Company's management has made a decision that it will make use of the purchase option once it becomes exercisable.

What is the initial measurement of the right-of-use asset?

Reference no: EM132977516

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