December 31, de real estate ta December 31.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer all three questions with solutions. The choices per question were only 3 since the incorrect ones have been eliminated already. Thanks.
Transcribed Image Text:A Entity A entered into a nine-year 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, 20x1, and every December 31 thereafter.
Entity A does not 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 liability at December
31, 20x1?
a. 280,000
b. 291,200
d. 468,000
8. Entity A leases computer equipment to customers under
direct-financing leases. The equipment has no residual value
at the end of the lease and the leases do not contain bargain
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 Entity A will eam
over the life of the lease?
a. 51,600
b. 75,000
(AICRA)
d. 139,450
10. On July 1, 20x6, Entity A leased a delivery truck from Entity B
under a 3-year operating lease. Total rent for the term of the
lease will be P36,000, payable as follows:
12 months at P 500 = P 6,000
12 months at P 750 = 9,000
12 months at P1,750 = 21,000
All payments were made when due. In Entity B's June 30, 20x8,
balance sheet, the accrued rent receivable should be reported as
b. 9,000
(AICPA)
с. 12,000
d. 21,000
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