n January 1,2020, an equipment of ABC Company with a carrying value of P 1,500,000 was sold at P 2,000,000 equal to its fair value to DEF Company. ABC immediately leased back the equipment from DEF Company with an annual rental of P 150,000 for 5 years, payable every December 31 of each year. The market rate of interest is 10%. How much is the gain on sale leaseback to be recognized by ABC Company? (For present value factors, do not round off) A. P 568,618.02 B. P 426,463.51
n January 1,2020, an equipment of ABC Company with a carrying value of P 1,500,000 was sold at P 2,000,000 equal to its fair value to DEF Company. ABC immediately leased back the equipment from DEF Company with an annual rental of P 150,000 for 5 years, payable every December 31 of each year. The market rate of interest is 10%. How much is the gain on sale leaseback to be recognized by ABC Company? (For present value factors, do not round off) A. P 568,618.02 B. P 426,463.51
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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On January 1,2020, an equipment of ABC Company with a carrying value of P 1,500,000 was sold at P 2,000,000 equal to its fair value to DEF Company. ABC immediately leased back the equipment from DEF Company with an annual rental of P 150,000 for 5 years, payable every December 31 of each year. The market rate of interest is 10%.
How much is the gain on sale leaseback to be recognized by ABC Company? (For
A. P 568,618.02
B. P 426,463.51
C. P 1,073,536.49
D. P 357,845.49
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