The Galmine laboratory leases a spectrometer for a lease term of 5 years, with a purchase option at the end of the lease that it is reasonably certain to exercise: the exercise price was included in the lease liability and the cost of the right-of-use asset, i.e. 330,000, therefore reflects the exercise of the option. The useful life of the spectrometer is 11 years. Straight-line depreciation (method chosen). Compute the annual depreciation charge and the carrying amount at the end of the second year.
- Cost of the right-of-use asset
- 330,000
- Lease term
- 5
- Useful life of the spectrometer
- 11