The firm Bureaulis leases office chairs for 36 months from 1 July 20X1. Each chair is a small item of furniture whose value when new is low (case datum); Bureaulis applies the low-value exemption to this lease. Payments are made in advance on 1 July each year: 1,800 in the first year, 2,100 in the second and 2,400 in the third. No other systematic basis is more representative. Determine the lease expense for 20X1 (year ended 31 December) and the prepaid expense at that date.
- Lease term (months)
- 36
- Annual payment in advance, year 1
- 1,800
- Annual payment in advance, year 2
- 2,100
- Annual payment in advance, year 3
- 2,400