ACCA FR · Chapter 14 · Question 5 of 15
Nyala Co's lease liabilities (current and non-current together) were $400k at the start of the year and $420k at the end. During the year new leases added $150k to the liabilities, and interest on lease liabilities was $30k. What were the total lease payments in the year, and how much of them reduced the lease liability (the capital part)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Total payments $160k, of which $130k capital
Explanation
Lease liability working: opening 400 + new leases 150 (non-cash) + interest 30 - payments X = closing 420. X = 400 + 150 + 30 - 420 = $160k. Capital repaid = 160 - interest 30 = $130k, shown in financing activities. Interest of $30k is shown according to the entity's policy for interest paid.
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