MULTIPLE CHOICE – COMPUTATIONAL51. On December 30, 2019, Haber Co. leased a new machine from Gregg Corp. The followingdatarelate to the lease transaction at the inception of the lease:Lease term10 yearsAnnual rental payable at end of each lease yearP100,000Useful life of machine12 yearsImplicit interest rateThe lease has no renewal option, and the possession of the machine reverts to Gregg when10 %thelease terminates. At the inception of the lease, Heber should record a lease liability ofd. 676,000b. 615,000c. 630,000a.52. On January 2, 2019, Ashe Company entered into a ten-year non-cancellable lease requiringyear-end payments of P100,000. Ashe's incremental borrowing rate is 12% while the lessor'simplicitinterest rate, known to Ashe, is 10%. Ownership of the property remains with the lessor atexpiration of the lease. There is no bargain purchase option. The leased property has anestimatedeconomic life of 12 years. What amount should Ashe capitalize for this leased property onJanuary 2, 2019?a. 1,000,000b. 614,500c. 565,000d. 0

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51. On December 30, 2019, Haber Co. leased a new machine from Gregg Corp. The following data relate to the lease transaction at the inception of the lease: Lease term 10 years Annual rental payable at end of each lease year P100,000 Useful life of machine 12 years Implicit interest rate 10 % The lease has no renewal option, and the possession of the machine reverts to Gregg when the lease terminates. At the inception of the lease, Heber should record a lease liability of a. 0 b. 615,000 c. 630,000 d. 676,000

51. On December 30, 2019, Haber Co. leased a new machine from Gregg Corp. The following data relate to the lease transaction at the inception of the lease: Lease term 10 years Annual rental payable at end of each lease year P100,000 Useful life of machine 12 years Implicit interest rate 10 % The lease has no renewal option, and the possession of the machine reverts to Gregg when the lease terminates. At the inception of the lease, Heber should record a lease liability of a. 0 b. 615,000 c. 630,000 d. 676,000

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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