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On December 30, 2019, Haber Co. leased a new machine from Gregg Corp. The following data relate to the lease transaction at the inception of the lease: Lease term                            10 years Annual rental payable at end of each lease year            P100,000 Useful life of machine                        12 years Implicit interest rate                        10 % The lease has no renewal option, and the possession of the machine reverts to Gregg when the lease terminates. At the inception of the lease, Heber should record a lease liability of a.    0            b. 615,000            c. 630,000        d. 676,000

On December 30, 2019, Haber Co. leased a new machine from Gregg Corp. The following data relate to the lease transaction at the inception of the lease: Lease term                            10 years Annual rental payable at end of each lease year            P100,000 Useful life of machine                        12 years Implicit interest rate                        10 % The lease has no renewal option, and the possession of the machine reverts to Gregg when the lease terminates. At the inception of the lease, Heber should record a lease liability of a.    0            b. 615,000            c. 630,000        d. 676,000

FINANCIAL ACCOUNTING
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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51. On December 30, 2019, Haber Co. leased a new machine from Gregg Corp. The following data relate to the lease transaction at the inception of the lease:
Lease term                            10 years
Annual rental payable at end of each lease year            P100,000
Useful life of machine                        12 years
Implicit interest rate                        10 %
The lease has no renewal option, and the possession of the machine reverts to Gregg when the lease terminates. At the inception of the lease, Heber should record a lease liability of

a.    0            b. 615,000            c. 630,000        d. 676,000

 

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