The caterer Ferrand leases 3 units identical refrigerated trucks under a single lease. An amendment terminates the lease of 1 units truck for the remaining term, with a proportionate decrease in the remaining payments. Just before the amendment, the right-of-use asset amounts to 150,000 and the lease liability to 135,000. Case data: the implicit rate cannot be determined; the 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 trucks (method chosen). Record the entry (decrease posted directly to the right-of-use asset account).
- Trucks leased
- 3
- Trucks returned
- 1
- Carrying amount of the right-of-use asset
- 150,000
- Lease liability before the amendment
- 135,000