. 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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