3. On January 1, 20x1, Lessor enters into a 4-year lease of equipment that has a remaining useful life of 15 years. The equipment will revert back to Lessor at the end of the lease term. The annual lease payments, payable at the end of each year, are: P100,000 in 20x1; P120,000 in 20x2; P140,000 in 20x3; and P160,000 in 20x4. As an inducement to enter into the lease, Lessor granted Lessee the first six months of the lease as rent- free. Lessor received a lease bonus of P20,000 from Lessee at lease commencement. I Inubie Requirement: Provide all the journal entries in Lessor's books.

3. On January 1, 20x1, Lessor enters into a 4-year lease of equipment that has a remaining useful life of 15 years. The equipment will revert back to Lessor at the end of the lease term. The annual lease payments, payable at the end of each year, are: P100,000 in 20x1; P120,000 in 20x2; P140,000 in 20x3; and P160,000 in 20x4. As an inducement to enter into the lease, Lessor granted Lessee the first six months of the lease as rent- free. Lessor received a lease bonus of P20,000 from Lessee at lease commencement. I Inubie Requirement: Provide all the journal entries in Lessor's books.

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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On December 31, 2020, Cleeneth Company leased equipment under a finance lease. Annual lease payments of P400,000 are due December 31 for 10 years. The equipment's useful life is 10 years, and the interest rate implicit in the lease is 10%. The lease obligation was recorded on December 31, 2020 at P2,700,000 and the first lease payment was made on that date. What amount should Cleeneth Company include in current liabilities in relation to the finance lease in its December 31, 2020 statement of financial position?
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