The Bastide retail chain returns to the lessor, by amendment, 25 % of the sales area of a store for the remaining term, the remaining payments decreasing in the same proportion. Before the amendment, the right-of-use asset is 480,000 and the lease liability 520,000. Case data: the revised rate at the effective date equals the original rate, so the liability also decreases by 25 %; the partial termination is measured in proportion to the area (method chosen). Record the modification entry (decrease posted directly to the right-of-use asset account).
- Carrying amount of the right-of-use asset before the amendment
- 480,000
- Lease liability before the amendment
- 520,000
- Share of the area returned
- 25 %