____1. Initial amount recognized as right of use asset ____________2. Initial amount recognized as leased liability ____________3. Depreciation Expense in 2011 assuming cost model ____________4. Book value of right of use asset on December 31, 2012 ____________5. Current Lease Liability on December 31,2011 ____________6. Noncurrent Lease Liability on December 31,2012 ____________7. Interest expense in 2011 ____________8. Interest expense in 2012
____1. Initial amount recognized as right of use asset ____________2. Initial amount recognized as leased liability ____________3. Depreciation Expense in 2011 assuming cost model ____________4. Book value of right of use asset on December 31, 2012 ____________5. Current Lease Liability on December 31,2011 ____________6. Noncurrent Lease Liability on December 31,2012 ____________7. Interest expense in 2011 ____________8. Interest expense in 2012
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
____________1. Initial amount recognized as right of use asset
____________2. Initial amount recognized as leased liability
____________3.
____________4. Book value of right of use asset on December 31, 2012
____________5. Current Lease Liability on December 31,2011
____________6. Noncurrent Lease Liability on December 31,2012
____________7. Interest expense in 2011
____________8. Interest expense in 2012
Transcribed Image Text:Problem 13. SMC Inc. leased a machine on January 1,2011 to SM Inc. with the following pertinent
information:
Annual rental payable at the beginning of each year
Lease term
P500,000
5 years
6 years
2,400,000
14%
12%
Useful life of machine
Fair value of machine on January 1,2011
Incremental borrowing rate of lessee
Implicit interest rate of lessor known to lessee
Bargain purchase option at the end of lease term
Residual value of the machine
Initial direct cost incurred by lessee
Prepaid bonus paid by lessee
Estimated restoration cost in which lessee has contractual obligation
100,000
200,000
300,000
400,000
1,000,000
Required: Based on your audit, determine the following:
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