54.Robbins, Inc., leased a machine from Ready Leasing Co. The lase requires 10 annual payments of P10,000 beginning immediately. The lease specifies an interest rate of 12% and a purchase option of P10,000 at the end of the tenth year, even though the machine’s

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Chapter1: Financial Statements And Business Decisions
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54.Robbins, Inc., leased a machine from Ready Leasing Co. The lase requires 10 annual payments of P10,000 beginning immediately. The lease specifies an interest rate of 12% and a purchase option of P10,000 at the end of the tenth year, even though the machine’s estimated value on that date is P20,000. It is reasonably certain that Robbins will exercise the purchase option. Robbins’ incremental borrowing rate is 14%. What amount should Robbins record the right-of-use asset at the beginning of the lease term?

62,160

64,860                                             

66,500                             

69,720

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