On January 1, 2020, an entity leased an equipment for four years at an annual rental of P170,000 payable at the end of each year. The estimated useful life of the equipment is four years. The present value factor of an ordinary annuity of 1 for four years of an implicit rate of 12% is 3.0373. The lease provides for a transfer of ownership of the equipment to the lessee at the end of the lease term. Compute for the depreciation expense for the right of use of asset for the year ended December 31, 2020.
On January 1, 2020, an entity leased an equipment for four years at an annual rental of P170,000 payable at the end of each year. The estimated useful life of the equipment is four years. The present value factor of an ordinary annuity of 1 for four years of an implicit rate of 12% is 3.0373. The lease provides for a transfer of ownership of the equipment to the lessee at the end of the lease term. Compute for the depreciation expense for the right of use of asset for the year ended December 31, 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2020, an entity leased an equipment for four years at an
annual rental of P170,000 payable at the end of each year. The estimated
useful life of the equipment is four years. The present value factor of an
ordinary annuity of 1 for four years of an implicit rate of 12% is 3.0373. The
lease provides for a transfer of ownership of the equipment to the lessee
at the end of the lease term. Compute for the
the right of use of asset for the year ended December 31, 2020.
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