MC41 On January 1, 2022, Thelma Industries leased equipment to Trician Company for a four-year period ending December 31, 2025. expected useful life of five years. P118,951, which includes P10,000 executory costs. equipment's fair value is P400,000. The lessee guarantees the residual value of P80,000. Lease payment is due every December 31 and Trician made the first payment on December 31, 2022. Trician's implicit interest rate is 10%. The equipment cost Thelma P300,000 and has an Annual payments are The Thelma incurred P15,000 costs to consummate the lease contract. Present value of 1 'discounted at 10% for 4 periods is 0.68301. Present value of annuity due of 1 for 4 periods discounted at 10% is 3.48685. Present value of ordinary annuity of 1 at 10% for 4 periods is 3. 16087
MC41 On January 1, 2022, Thelma Industries leased equipment to Trician Company for a four-year period ending December 31, 2025. expected useful life of five years. P118,951, which includes P10,000 executory costs. equipment's fair value is P400,000. The lessee guarantees the residual value of P80,000. Lease payment is due every December 31 and Trician made the first payment on December 31, 2022. Trician's implicit interest rate is 10%. The equipment cost Thelma P300,000 and has an Annual payments are The Thelma incurred P15,000 costs to consummate the lease contract. Present value of 1 'discounted at 10% for 4 periods is 0.68301. Present value of annuity due of 1 for 4 periods discounted at 10% is 3.48685. Present value of ordinary annuity of 1 at 10% for 4 periods is 3. 16087
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 10MC: On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring...
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Question
How much should Thelma report as net investment in lease on December 31, 2022
a. P 291,049
b. P 320,154
c. P 321, 049
d. P 331, 049
please explain the answer and provide the solution in good accounting form.
![MC41 On January 1, 2022, Thelma Industries leased equipment to
Trician Company for a four-year period ending December 31,
The equipment cost Thelma P300,000 and has an
Annual payments are
The
2025.
expected useful life of five years.
P118,951, .which includes P10,000 executory costs.
equipment's fair value is P400,000. The lessee guarantees the
residual value of P80,000. Lease payment is due every
December 311 and Trician made the first payment on December
31, 2022. Trician's implicit interest rate is 10%.
Thelma incurred P15,000 costs to consummate the lease
contract. ,
Present value of 1 'discounted at 10% for 4 periods is 0.68301.
Present value of annuity due of 1 for 4 periods discounted at
10% is 3.48685.
Present value of ordinary annuity of 1 at 10% for 4 periods is
3.16987.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F38825fa7-25d1-4d00-abae-09f1b37e3439%2F68384cee-686e-4e00-b583-7caf5f26bfa8%2F5hqpsj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:MC41 On January 1, 2022, Thelma Industries leased equipment to
Trician Company for a four-year period ending December 31,
The equipment cost Thelma P300,000 and has an
Annual payments are
The
2025.
expected useful life of five years.
P118,951, .which includes P10,000 executory costs.
equipment's fair value is P400,000. The lessee guarantees the
residual value of P80,000. Lease payment is due every
December 311 and Trician made the first payment on December
31, 2022. Trician's implicit interest rate is 10%.
Thelma incurred P15,000 costs to consummate the lease
contract. ,
Present value of 1 'discounted at 10% for 4 periods is 0.68301.
Present value of annuity due of 1 for 4 periods discounted at
10% is 3.48685.
Present value of ordinary annuity of 1 at 10% for 4 periods is
3.16987.
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