Corbières leases an office building for 5 years. Annual lease payments of 100,000 are payable in advance; the first is paid at the commencement date. The present value of the 4 remaining payments, at the incremental borrowing rate of 4% and rounded to the nearest euro, is 362,990. There are no initial direct costs, no lease incentives and no restoration costs. Record the entry at the commencement date.
- Annual lease payment payable in advance
- 100,000
- Present value of the lease payments not yet paid
- 362,990