Homework Help is Here – Start Your Trial Now!
Business
Accounting
A government entity, which is a lessee under a finance lease. recognizes an asset acquired under a finance lease, and the related lease liability, measured at a. the fair value of the leased property at inception date * the present value of the minimum lease payments at inception date

A government entity, which is a lessee under a finance lease. recognizes an asset acquired under a finance lease, and the related lease liability, measured at a. the fair value of the leased property at inception date * the present value of the minimum lease payments at inception date

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

x means incorrect answer not included in the choices. 

HOICE 1. A government entity, which is a lessee under a finance lease recognizes an asset acquired under a finance lease, and the related lease liability, measured at the fair value of the leased property at inception date * the present value of the minimum lease payments at inception date c. the lower of a and b d. the higher of a and b a. Entity A entered into a nine-vear finance lease on a warehouse on December 31, 20x1. Lease payments of P52.000, which include real estate taxes of P2,000, are due annually, beginning on December 31, 20×1, and every December 31 thereafter. Entity A does noţ know the interest rate implicit in the lease: Entity A's incremental borrowing rate is 9%. What amount should Entity A report as finance lease liabilíty at December 31, 20x1? a. X450,000 280,000 b. 291,200 d. 468,000 (AICPA) Entity A leases computer equipment to customers under direct-financing leases. The equipment has no residual vale at the end of the lease and the leases do not contain bargzin purchase options. Entity A wishes to earn 8% interest on a five-year lease of equipment with a fair value of P323,400. The first rental payment is due at the lease commencement. What is the total amount of interest revenue that Etity A will eam 8. over the life of the lease? * 129,360 d. 139,450 a. 51,600 b. (ACRA 75,000 10. On July 1, 20x6, Entity A leased a delivvery truck from Entity B under a 3-year operating lease. Total rent for the term of the lease will be P36,000, payable as followsc 12 months at P 500-P 6,000 12 months at P 750 - 9,000 12 months at PI,750= 21,00O All payments were made when đue. In Entity B's June 30, 208, balance sheet, the accrued rent receivable should be reported as to c. 12.000 d. 21,000 9,000 WIOPA
Transcribed Image Text:HOICE 1. A government entity, which is a lessee under a finance lease recognizes an asset acquired under a finance lease, and the related lease liability, measured at the fair value of the leased property at inception date * the present value of the minimum lease payments at inception date c. the lower of a and b d. the higher of a and b a. Entity A entered into a nine-vear finance lease on a warehouse on December 31, 20x1. Lease payments of P52.000, which include real estate taxes of P2,000, are due annually, beginning on December 31, 20×1, and every December 31 thereafter. Entity A does noţ know the interest rate implicit in the lease: Entity A's incremental borrowing rate is 9%. What amount should Entity A report as finance lease liabilíty at December 31, 20x1? a. X450,000 280,000 b. 291,200 d. 468,000 (AICPA) Entity A leases computer equipment to customers under direct-financing leases. The equipment has no residual vale at the end of the lease and the leases do not contain bargzin purchase options. Entity A wishes to earn 8% interest on a five-year lease of equipment with a fair value of P323,400. The first rental payment is due at the lease commencement. What is the total amount of interest revenue that Etity A will eam 8. over the life of the lease? * 129,360 d. 139,450 a. 51,600 b. (ACRA 75,000 10. On July 1, 20x6, Entity A leased a delivvery truck from Entity B under a 3-year operating lease. Total rent for the term of the lease will be P36,000, payable as followsc 12 months at P 500-P 6,000 12 months at P 750 - 9,000 12 months at PI,750= 21,00O All payments were made when đue. In Entity B's June 30, 208, balance sheet, the accrued rent receivable should be reported as to c. 12.000 d. 21,000 9,000 WIOPA
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Avoiding and Correcting Credit Mistakes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS