At what amount will Cielo company present its lease liability as of December 31,2022? * On January 1,2020, Cielo Company leased an equipment from a lessor with the following pertinent information: Annual rental payable at the end of each year 500,000 8 years 10 years Lease term Useful life of equipment Implicit interest rate PV of an ordinary annuity of 1 for 8 periods at 10% PV of an annuity due of 1 for 8 periods at 10% Present value of 1 for 8 periods at 10% 10% 5.33 5.87 0.47 The entity has the option to purchase the equipment at the end of the lease term by paying P 500,000 which is significantly lower than the expected fair value of the equipment on the option exercise date. There is reasonable certainty that the entity will exercise the option. O P2,204,900 D P 1,925,390 D P 2,459,000 O P 2,690,000

At what amount will Cielo company present its lease liability as of December 31,2022? * On January 1,2020, Cielo Company leased an equipment from a lessor with the following pertinent information: Annual rental payable at the end of each year 500,000 8 years 10 years Lease term Useful life of equipment Implicit interest rate PV of an ordinary annuity of 1 for 8 periods at 10% PV of an annuity due of 1 for 8 periods at 10% Present value of 1 for 8 periods at 10% 10% 5.33 5.87 0.47 The entity has the option to purchase the equipment at the end of the lease term by paying P 500,000 which is significantly lower than the expected fair value of the equipment on the option exercise date. There is reasonable certainty that the entity will exercise the option. O P2,204,900 D P 1,925,390 D P 2,459,000 O P 2,690,000

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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