Myro Company leased a new machine from Myie Corp. on May 1, 2014 under a lease with the following information: Annual rental payable at beginning of each lease year P 400,000; Lease term 10 years Useful life of machine 12 years Implicit interest rate 14% Present Value of an annuity of 1 advance for 10 periods at 10 periods at 14%. 0.27 Myro has the option to purchase the machine on May 1, 2024, by paying P 500,000, which approximate the expected fair value of the machine on the option exercise date. On May 1, 2014, how much should Myro record the leased asset?
Myro Company leased a new machine from Myie Corp. on May 1, 2014 under a lease with the following information: Annual rental payable at beginning of each lease year P 400,000; Lease term 10 years Useful life of machine 12 years Implicit interest rate 14% Present Value of an annuity of 1 advance for 10 periods at 10 periods at 14%. 0.27 Myro has the option to purchase the machine on May 1, 2024, by paying P 500,000, which approximate the expected fair value of the machine on the option exercise date. On May 1, 2014, how much should Myro record the leased asset?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Myro Company leased a new machine from Myie Corp. on May 1, 2014 under a lease with the following information:
Annual rental payable at beginning of each lease year P 400,000; Lease term
10 years Useful life of machine 12 years
Implicit interest rate 14% Present Value of an annuity of 1 advance for 10 periods at 10 periods at 14%. 0.27
Myro has the option to purchase the machine on May 1, 2024, by paying P 500,000, which approximate the expected fair value of the machine on the option exercise date. On May 1, 2014, how much should Myro record the leased asset?
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