On December 31, 2018, Zonrox Company leased a new machine from Oxide Corporation. The following data relate to the lease transaction at the inception of the lease: 10 years P240,000 12 years Lease term Annual rental payable at the end of each term Estimated life of machine Implicit interest rate Present value of an annuity of P1 for 10 periods at 10% Present value of 1 at 10% for 10 periods 10% 6.145 0.386 Unguaranteed residual value Payment to lessor to obtain a long-term lease Annual maintenance cost 150,000 30,000 35,000 The lease provides for neither a transfer of title to the lessee nor a purchase option. Compute the lease liability on December 31, 2019.

On December 31, 2018, Zonrox Company leased a new machine from Oxide Corporation. The following data relate to the lease transaction at the inception of the lease: 10 years P240,000 12 years Lease term Annual rental payable at the end of each term Estimated life of machine Implicit interest rate Present value of an annuity of P1 for 10 periods at 10% Present value of 1 at 10% for 10 periods 10% 6.145 0.386 Unguaranteed residual value Payment to lessor to obtain a long-term lease Annual maintenance cost 150,000 30,000 35,000 The lease provides for neither a transfer of title to the lessee nor a purchase option. Compute the lease liability on December 31, 2019.

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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