The events organiser Festivia leases a marquee structure for 10 months from 1 September 20X1, with no purchase option; it applies the short-term lease exemption to this class of assets. The first month is rent-free (1 month), then Festivia pays 5,000 in arrears, at the end of each following month. The reporting period ends on 31 December 20X1. Determine the lease expense for 20X1 and the accrued expense in the statement of financial position at that date.
- Lease term (months)
- 10
- Rent-free months
- 1
- Monthly payment in arrears after the rent-free period
- 5,000