What is total charge to appear in the statement of profit

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Penny-royal ltd acquired an item of plant under a lease on 1 April 2019. an initial payment of $ 2000 000 is paid on 1 April 2019 and the present value of the future lease payments is $ 7 092 000. penny royal ltd will make four further annual payments of $ 2 000 000 paid in advance commencing 1 April 2020, the useful life of the plant is deemed to be 8 years. Penny royal ltd will obtain legal tittle of the plant following the final payment. the interest rate implicit in lease 5%.

Question 1: What is the total charge to appear in the statement of profit or loss for the year ended 31 March 2020?

Reference no: EM132531725

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