An entity leased a machinery with useful life of 4 years on January 1, 2020 for period of 5 years with fixed annual rental of P150,000 which is to be paid at the end of each year. The lease contract provides that the leased asset will be transferred to the lessee at the end of the lease term. The implicit interest rate in the lease is 10%. REQUIRED: Prepare table of amortization and journal entries for the entire lease term.
An entity leased a machinery with useful life of 4 years on January 1, 2020 for period of 5 years with fixed annual rental of P150,000 which is to be paid at the end of each year. The lease contract provides that the leased asset will be transferred to the lessee at the end of the lease term. The implicit interest rate in the lease is 10%. REQUIRED: Prepare table of amortization and journal entries for the entire lease term.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An entity leased a machinery with useful life of 4 years on January 1, 2020 for period of 5 years with fixed annual rental of P150,000
which is to be paid at the end of each year. The lease contract provides that the leased asset will be transferred to the lessee at the
end of the lease term. The implicit interest rate in the lease is 10%. REQUIRED: Prepare table of amortization and
the entire lease term.
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