On December 31, 2021, Maroon Co. leased an equipment with a cost of P2,000,000 to Green Co. for 5-years, which is also the useful life of the asset. The lease agreement specifies equal annual payment of P467,273 beginning on December 31, 2021. At the end of the lease term, the equipment will revert to Maroon Co. A third party related to the lease guarantees the residual value of the equipment amounting to P200,000. The rate implicit in the lease is 12%. How much is the lease- related asset to be shown as current in the statement of financial position on December 31, 2021?
On December 31, 2021, Maroon Co. leased an equipment with a cost of P2,000,000 to Green Co. for 5-years, which is also the useful life of the asset. The lease agreement specifies equal annual payment of P467,273 beginning on December 31, 2021. At the end of the lease term, the equipment will revert to Maroon Co. A third party related to the lease guarantees the residual value of the equipment amounting to P200,000. The rate implicit in the lease is 12%. How much is the lease- related asset to be shown as current in the statement of financial position on December 31, 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On December 31, 2021, Maroon Co. leased an equipment with a cost of
P2,000,000 to Green Co. for 5-years, which is also the useful life of the
asset. The lease agreement specifies equal annual payment of
P467,273 beginning on December 31, 2021. At the end of the lease
term, the equipment will revert to Maroon Co. A third party related to the
lease guarantees the residual value of the equipment amounting to
P200,000. The rate implicit in the lease is 12%. How much is the lease-
related asset to be shown as current in the statement of financial
position on December 31, 2021?
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