2. On January 1, 20x1, Noon, Inc. enters into a 3-year lease of a machine for an annual rent of P200,000 payable at the end of each year. The machine has a remaining useful life of 5 years. The interest rate implicit in the lease is 10%, while Noon Inc.'s incremental borrowing rate is 12%. Noon, Inc. uses the straight-line method of depreciation.

2. On January 1, 20x1, Noon, Inc. enters into a 3-year lease of a machine for an annual rent of P200,000 payable at the end of each year. The machine has a remaining useful life of 5 years. The interest rate implicit in the lease is 10%, while Noon Inc.'s incremental borrowing rate is 12%. Noon, Inc. uses the straight-line method of depreciation.

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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