On January 1, 2019, Tharn Corporation leased a machinery from Type Company on a five-year lease term at P150,000 annual rental payments, paid in advance. There is a bargain purchase option on December 31, 2023 of P240,000. The economic life of the equipment is 15 years. The interest rate implicit in the lease is 12%. b. How much is the depreciation expense to be recognized in 2019 related to the right-of-use asset? A. P39,451 B. P49,451 C. P118,354 D. P148,354 a. Which of the following is part of the entry or entries to be recorded at the end of lease term assuming that Tharn fails to exercise its bargain purchase option? A. Debit Loss on Unexercised Bargain Purchase Option, P245,516 B. Debit Lease Liability, P325,236 C. Debit Interest Payable, P25,736 D. Credit Right-of-Use Asset, P741,771
On January 1, 2019, Tharn Corporation leased a machinery from Type Company on a five-year lease term at P150,000 annual rental payments, paid in advance. There is a bargain purchase option on December 31, 2023 of P240,000. The economic life of the equipment is 15 years. The interest rate implicit in the lease is 12%.
b. How much is the
A. P39,451
B. P49,451
C. P118,354
D. P148,354
a. Which of the following is part of the entry or entries to be recorded at the end of lease term assuming that Tharn fails to exercise its bargain purchase option?
A. Debit Loss on Unexercised Bargain Purchase Option, P245,516
B. Debit Lease Liability, P325,236
C. Debit Interest Payable, P25,736
D. Credit Right-of-Use Asset, P741,771
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