On January 1, 2020, there was a modification on the lease contract of Amber Company resulting from the decrease in its scope. This resulted to a decreased amount of annual rentals payable every December 31 for the remaining three-year lease term in the amount of P180,000. The implicit rate on the lease on that date is 11%. As a result of the decrease in scope, the carrying amount of the right of use asset as of yearend 2019 which was P466,764 was reduced by P70,015. The carrying amounts of the right of use asset and finance lease liability as of yearend 2020 were P270,857 and P308,251, respectively. How much is the carrying amount of the finance lease liability as of yearend 2019?
On January 1, 2020, there was a modification on the lease contract of Amber Company resulting from the decrease in its scope. This resulted to a decreased amount of annual rentals payable every December 31 for the remaining three-year lease term in the amount of P180,000. The implicit rate on the lease on that date is 11%. As a result of the decrease in scope, the carrying amount of the right of use asset as of yearend 2019 which was P466,764 was reduced by P70,015. The carrying amounts of the right of use asset and finance lease liability as of yearend 2020 were P270,857 and P308,251, respectively. How much is the carrying amount of the finance lease liability as of yearend 2019?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 1, 2020, there was a modification on the lease contract of Amber Company resulting from the decrease in its scope. This resulted to a decreased amount of annual rentals payable every December 31 for the remaining three-year lease term in the amount of P180,000. The implicit rate on the lease on that date is 11%. As a result of the decrease in scope, the carrying amount of the right of use asset as of yearend 2019 which was P466,764 was reduced by P70,015. The carrying amounts of the right of use asset and finance lease liability as of yearend 2020 were P270,857 and P308,251, respectively.
- How much is the carrying amount of the finance lease liability as of yearend 2019?
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