. Jackie Chan Leasing signs an equipment lease contract with Chris Tucker on January 1, 2022. The following information pertains to the lease. Lease term - 5 years Equipment's useful life - 6 years Bargain option price - P40,000 Implicit rate, known by Chris Tucker - 10% Fair value of the asset at January 1, 2022 - P600,000 Estimated recoverable value at the end of 5 years - P80,000 Estimated residual value at the end of 6 years - P20,000 The cost of the asset to Jackie Chan Leasing is P600,000. Chris Tucker uses the sum-of-the years' digit method to depreciate this type of equipment. Annual lease payments are made at the beginning of each year, starting January 1, 2022. REQUIRED: (a) Tucker for years 2022 and 2023 as a result Give the entries in the books of Chris of the lease contract. (b) Give the entries in the books of Jackie Chan Leasing for years 2022 and 2023.
. Jackie Chan Leasing signs an equipment lease contract with Chris Tucker on January 1, 2022. The following information pertains to the lease. Lease term - 5 years Equipment's useful life - 6 years Bargain option price - P40,000 Implicit rate, known by Chris Tucker - 10% Fair value of the asset at January 1, 2022 - P600,000 Estimated recoverable value at the end of 5 years - P80,000 Estimated residual value at the end of 6 years - P20,000 The cost of the asset to Jackie Chan Leasing is P600,000. Chris Tucker uses the sum-of-the years' digit method to depreciate this type of equipment. Annual lease payments are made at the beginning of each year, starting January 1, 2022. REQUIRED: (a) Tucker for years 2022 and 2023 as a result Give the entries in the books of Chris of the lease contract. (b) Give the entries in the books of Jackie Chan Leasing for years 2022 and 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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