Joy Company acquired an asset costing P5,239,000. The asset is leased on January 1, 2020 to another entity. Five annual lease payments are due each January 1, beginning January 1, 2020. The unguaranteed residual value of the asset at the end of the lease term on December 31, 2024 is P2,000,000. The asset will revert to Joy Company at the end of the lease term. The lessor's implicit rate is 8%. What is the annual rental payment?

Joy Company acquired an asset costing P5,239,000. The asset is leased on January 1, 2020 to another entity. Five annual lease payments are due each January 1, beginning January 1, 2020. The unguaranteed residual value of the asset at the end of the lease term on December 31, 2024 is P2,000,000. The asset will revert to Joy Company at the end of the lease term. The lessor's implicit rate is 8%. What is the annual rental payment?

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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