The Orvigne hotel group leases a fleet of electric shuttles. At the start of the year, the balance of the lease liability is 320,000; the incremental borrowing rate used at the commencement date is 4.5 %. The annual lease payment of 72,000 is settled at year-end. Record, for the year, the finance charge and then the settlement of the lease payment.
- Lease liability at the start of the year
- 320,000
- Discount rate used
- 4.5 %
- Lease payment settled at year-end
- 72,000