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  3. c. an entity entered into a contract to hire a pla

c. An entity entered into a contract to hire a plant on 1 January x2....

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Accounting

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c. An entity entered into a contract to hire a plant on 1 January x2. The rental of RM200,000 per annum is payable at the beginning of the year for five years. The fair value of the asset is RM1.2 million. In year 4, when finalising the financial statements for the year ended 31 December x3, it was discovered that it is a finance lease and not an operating lease. The entity had accounted for the rental payment as an expense. c. An entity entered into a contract to hire a plant on 1 January x2. The rental of RM200,000 per annum is payable at the beginning of the year for five years. The fair value of the asset is RM1.2 million. In year 4, when finalising the financial statements for the year ended 31 December x3, it was discovered that it is a finance lease and not an operating lease. The entity had accounted for the rental payment as an expense

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