On January 1, 2020, Yuri Company leased a machine with the following information: Annual rental payable at the end of each year Lease term 100,000 5 years 6% Implicit rate in the lease Present value of an ordinary annuity of 1 at 6% for 5 periods 4.2124 On January 1, 2022, Yuri Company and the lessor agreed to amend the original terms of the lease by reducing the annual lease payment by P20,000 and increasing the implicit rate to 8%. The present value of an ordinary annuity of 1 at 8% for 3 periods is 2.5771. Required: 1. Prepare the table of amortization for 2020 and 2021. 2. Prepare journal entries for 2020. 3. Remeasure the lease liability on January 1, 2022. 4. Prepare the table of amortization for 2022, 2023 and 2024. 5. Prepare the journal entries for 2022.
On January 1, 2020, Yuri Company leased a machine with the following information: Annual rental payable at the end of each year Lease term 100,000 5 years 6% Implicit rate in the lease Present value of an ordinary annuity of 1 at 6% for 5 periods 4.2124 On January 1, 2022, Yuri Company and the lessor agreed to amend the original terms of the lease by reducing the annual lease payment by P20,000 and increasing the implicit rate to 8%. The present value of an ordinary annuity of 1 at 8% for 3 periods is 2.5771. Required: 1. Prepare the table of amortization for 2020 and 2021. 2. Prepare journal entries for 2020. 3. Remeasure the lease liability on January 1, 2022. 4. Prepare the table of amortization for 2022, 2023 and 2024. 5. Prepare the journal entries for 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2020, Yuri Company leased a machine with
the following information:
Annual rental payable at the end of each year
Lease term
100,000
5 years
6%
Implicit rate in the lease
Present value of an ordinary annuity of
1 at 6% for 5 periods
4.2124
On January 1, 2022, Yuri Company and the lessor agreed to
amend the original terms of the lease by reducing the annual
lease payment by P20,000 and increasing the implicit rate to
8%.
The present value of an ordinary annuity of 1 at 8% for 3
periods is 2.5771.
Required:
1. Prepare the table of amortization for 2020 and 2021.
2. Prepare journal entries for 2020.
3. Remeasure the lease liability on January 1, 2022.
4. Prepare the table of amortization for 2022, 2023 and 2024.
5. Prepare the journal entries for 2022.
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