Chantiers Orbel leases a site hut for a lease term of 12 months from 1 April 20X1, with no purchase option. It applies the short-term lease exemption to this class of assets. The lessor grants a rent-free period for the first 2 months; afterwards, Orbel pays 3,600 at the end of each month until the end of the lease. Compute the lease expense for the year ended 31 December 20X1, recognised on a straight-line basis.
- Lease term (months)
- 12
- Rent-free months
- 2
- Monthly payment made at the end of the month after the rent-free period
- 3,600