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pennyroyal ltd acquired an item of plant under a lease on1 april 2019. an initial...

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Accounting

pennyroyal ltd acquired an item of plant under a lease on1 april 2019. an initial payment of N$2 000 000 is paid on 1 april 2019 and the present value of the future lease payments is N$7 092 000. pennyroyal ltd will make four further annual payments of N$2 000 000 paid in advance commencing 1 april 2020, the useful life of the plant is deemed tot be 8 years. pennyroyal ltd will obtain legal title of the plant following the final payment. the interest rate implicit lease is 5%. what is the total charge to appear in the statement of profit or loss for the year ended 31 march 2020?

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