A Machine with a fair value of OMR 18,400 was leased for a period of 5 years. The lease is classified as finance lease. The annual lease payment payable at the beginning of each year is OMR 4,400 at an interest rate of 10%.The present value of minimum lease payment is OMR 18,350. How much is the principal repayment in year 2? a. OMR 3005 b. None of these c. OMR 1395 d. OMR 4,400

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.