Belcombe leases a warehouse for 5 years from 1 January 20X1, the commencement date. Annual lease payments of 60,000 are made at the end of each year. The present value of those payments at the incremental borrowing rate of 6.5%, rounded to the nearest euro, is 249,341. No payment is made at or before the commencement date; there are no initial direct costs, no lease incentives and no restoration obligation. Record the entry at the commencement date.
- Present value of the lease payments not yet paid
- 249,341