On 1 January 2017, Celia enters into an 8-year lease contract for 6,000 square meters of office space. Annual lease payment is P180,000 payable on 31 December each year. On 1 January 2021, Celia and the property owner agree to amend the original lease for the remaining 4 years to include additional 8,000 square meters of office space. As a result, the lease payment increases to P390,000 per year . Celia's incremental borrowing rate is 5% in 2017 and 6% in 2021. How much should he recognized as total depreciation expense for the year ended 2021? how much should he recognized as total interest expense for the year ended 2021? how much should be recognized as interest expense for the year ended 2020 relating to the lease of 6,000 square meter of office space? how much is the amount of right-of-use asset to be recognized on 1 January 2017?
On 1 January 2017, Celia enters into an 8-year lease contract for 6,000 square meters of office space. Annual lease payment is P180,000 payable on 31 December each year. On 1 January 2021, Celia and the property owner agree to amend the original lease for the remaining 4 years to include additional 8,000 square meters of office space. As a result, the lease payment increases to P390,000 per year . Celia's incremental borrowing rate is 5% in 2017 and 6% in 2021. How much should he recognized as total depreciation expense for the year ended 2021? how much should he recognized as total interest expense for the year ended 2021? how much should be recognized as interest expense for the year ended 2020 relating to the lease of 6,000 square meter of office space? how much is the amount of right-of-use asset to be recognized on 1 January 2017?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On 1 January 2017, Celia enters into an 8-year lease contract for 6,000 square meters of office space. Annual lease payment is P180,000 payable on 31 December each year. On 1 January 2021, Celia and the property owner agree to amend the original lease for the remaining 4 years to include additional 8,000 square meters of office space. As a result, the lease payment increases to P390,000 per year . Celia's incremental borrowing rate is 5% in 2017 and 6% in 2021.
How much should he recognized as total depreciation expense for the year ended 2021?
how much should he recognized as total interest expense for the year ended 2021?
how much should be recognized as interest expense for the year ended 2020 relating to the lease of 6,000 square meter of office space?
how much is the amount of right-of-use asset to be recognized on 1 January 2017?
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