PETITE SMALL Co. entered into a lease of land and building. Annual lease payments payable at each year-end is P2,000,000. The lease is for 10 years. The remaining useful life of the building is 12 years. The fair values of related leasehold interests are as follows: P 4,000,000 8,000,000 P12.000,000 Land element Building element The implicit rate of interest on the lease is 10%. Requirement: Provide the entry, if any, to record the lease.
PETITE SMALL Co. entered into a lease of land and building. Annual lease payments payable at each year-end is P2,000,000. The lease is for 10 years. The remaining useful life of the building is 12 years. The fair values of related leasehold interests are as follows: P 4,000,000 8,000,000 P12.000,000 Land element Building element The implicit rate of interest on the lease is 10%. Requirement: Provide the entry, if any, to record the lease.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:PETITE SMALL Co. entered into a lease of land and building. Annual lease payments payable at each
year-end is P2,000,000. The lease is for 10 years. The remaining useful life of the building is 12 years.
The fair values of related leasehold interests are as follows:
P 4,000,000
8,000,000
P12.000,000
Land element
Building element
The implicit rate of interest on the lease is 10%.
Requirement: Provide the entry, if any, to record the lease.
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