An asset with a market value of P1,000,000 is leased on January 1, 2019. Five annual lease payments are due each December 31 beginning December 31, 2019. The guaranteed residual value on December 31, 2023, the last day of the lease term, is P400,000. The lessor’s implicit interest rate is 8%. What is the annual lease payment? A.P200,000 B.P182,456 C.P168,910 D.P120,000

An asset with a market value of P1,000,000 is leased on January 1, 2019. Five annual lease payments are due each December 31 beginning December 31, 2019. The guaranteed residual value on December 31, 2023, the last day of the lease term, is P400,000. The lessor’s implicit interest rate is 8%. What is the annual lease payment? A.P200,000 B.P182,456 C.P168,910 D.P120,000

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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Answer is $1,818 Please explain the reasoning and calculations
B10).
Date of commencement of lease - July 1, 2022 Duration of lease - 8 years Implicit rate of interest - 6% Initial up-front payment - P200,000 Lease payments at the end of each year - P100,000
On January 1, 2020, Mountain Inc. leases a machine used in its operations. The annual lease payment is $10,000 due on December 31 of 2020, 2021, and 2022. The fair value of the machine on January 1, 2020 is $26,730. The machine has no residual value. Mountain could borrow on a three-year collateralized loan at 6%. If the lease is accounted for as a finance lease, the total expenses related to this lease contract that Mountain Inc. will report in its income statement for the year ending December 31, 2020 is Select one: a. $10,600 b. $10,514 c. $10,717 d. $10,000
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Uramilaben
*attached is the problem REQUIRED: What is the lease liability on Dec. 31, 2020? What is the lease liability to be reported as non-current on Dec 31, 2020? What is the interest expense for 2020? What is the depreciation for 2020?
What is the interest expense for the calendar year 2022? (round off answer to the nearest WHOLE NUMBER) On March 31, 2021, SIX Company as lessee signed a ten-year non-cancelable lease for an equipment stipulating annual payments of P375,250. The first payment was made on March 31, 2021 and P375,250 annually on each March 31 for the next nine years. The present value on March 31, 2021 of the ten lease payments over the lease term using the rate implicit in the lease which SIX knows to be 12% was P3,175,500. The March 31, 2021 present value of the lease payments using SIX's incremental borrowing rate of 14% was P2,850,125. Ownership of the property remains with the lessor at expiration of the lease. There is no purchase option. The leased property has an estimated economic life of 12 years.
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On December 31, 2020, Brick Co. leases Equipment to House, Inc. Annual Lease Payments made at beginning of Lease year $159,000 Implicit rate Guaranteed Residual Value Expected Residual Value Present value of an annuity due (7%,5) Present value of an ordinary annuity (7%,5) Present value of a single sum (7%,5) 7% $155,500 $56,500 4.38721 4.10020 0.71299 What journal entry would House, Inc. make at December 31, 2020 to record the lease assuming this is a finance lease? O DR Right of Use Asset $768,152; CR Lease Liability $768,152 O DR Right of Use Asset $808,426; CR Lease Liability $808,436 O DR Right of Use Asset $737,850; CR Lease Liability $737,850 O DR Right of Use Asset $626,980; CR Lease Liability $626,980
Provide a journal of the lease expense for the period ended 31 December 2022 The lease commenced on 1 May 2020 and 31 December is the year end. The lease payment is R1200 per month for the first year and R1450 per month for the second year.
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