At 1 January 20X1, the commencement date, Lorvane's lease liability amounts to 180,000 (given), computed at a rate of 5 %. Annual lease payments of 41,575 are paid in arrears, on 31 December. Compute the interest expense for 20X1 and the lease liability at 31 December 20X1 after payment.
- Lease liability at 1 January 20X1
- 180,000
- Discount rate
- 5 %
- Annual lease payment made on 31 December
- 41,575