3. On 1 July 2020 the company had entered into a five-year lease agreement for an asset with MRF S.A.O.G. The company must make lease payments of RO 50,000 annually at the beginning of each year. No...

3. On 1 July 2020 the company had entered into a five-year lease agreement for an asset with MRF S.A.O.G. The company must make lease payments of RO 50,000 annually at the beginning of each year. No other fees or costs are required. The present value of the total lease payments is RO 208,500. The estimated useful life of the asset is 5 years. The cost of capital used is 10%.

Calculate the amount that will be charged in the income statement with regards to such asset for the year ended 31st December 2020 .

a) RO 36,700

b) RO 73,400

c) RO 57,550

d) RO 28,775