Lumeo leases a bottling line and guarantees the lessor the residual value of the equipment, which will be returned in one year. At the end of 20X5, thanks to a strong second-hand market, the amount Lumeo expects to pay under this guarantee in one year falls from 38,000 to 5,000. The discount rate of the lease is 10 %; the carrying amount of the right-of-use asset is 18,000. Record the remeasurement entry (for simplicity, the decrease in the right-of-use asset is posted directly to the right-of-use asset account).
- Amount expected under the guarantee before revision
- 38,000
- Amount expected under the guarantee after revision
- 5,000
- Discount rate of the lease
- 10 %
- Carrying amount of the right-of-use asset
- 18,000