The Coralis printing company leases 4 units identical rotary presses under a single lease. At the end of 20X3, an amendment terminates the lease of 1 units press for the remaining term and reduces the remaining payments proportionately. Just before the amendment, the right-of-use asset is 210,000 and the lease liability 190,000. Case data: the implicit rate cannot be determined; Coralis's incremental borrowing rate at the effective date, used as the revised rate, equals the original rate; the partial termination is measured in proportion to the number of presses (method chosen). Compute the decrease in the right-of-use asset and the gain or loss on the modification.
- Presses leased
- 4
- Presses returned
- 1
- Carrying amount of the right-of-use asset
- 210,000
- Lease liability before the amendment
- 190,000