Mistralis leases an office floor for 5 years. Annual lease payments of 120,000 are payable in advance, at the start of each year; the first is paid at the commencement date. The incremental borrowing rate, used in the absence of a readily determinable implicit rate, is 4 %. Compute the lease liability at the commencement date, rounded to the nearest euro.
- Annual lease payment payable in advance
- 120,000
- Lease term
- 5
- Incremental borrowing rate
- 4 %