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Question Four (a) GTA entered into a second agreement to lease a further item of plant, also with a fair value of R1,700,000,

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Answer #1
Year Annual Payment Interest Decrease in Balance Balance at end
20x2 1,700,000
20x2 400000               2,77,440             1,22,560      15,77,440
20x3 400000               2,57,438             1,42,562      14,34,878
20x4 400000               2,34,172             1,65,828      12,69,050

Carrying value of non current portion of lease liability at 31 December 20X2 = 1577440-142562 = R1,434,878

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