42 On January 1, 2021, ABC Company sold machinery with carrying amount of P550,000 forP800,000, which is the fair value of the asset on this date, and then immediately leased themachine back for P160,000 annually payable in advance for five years. The implicit rate is 12%.Uusing four decimal places as PV factors, which of the following will be part of thecompound journal entry ABC Company will prepare on January 1, 2021? *O Debit Cash, P800,000O Credit Lease liability, P645,968O Credit Gain on Sale-Leaseback, P48,315Debit Right-of-Use Machinery, P444,103

Present value of lease liabilities = present value of lease payments made Since payment are made in…

On January 1, 2021, ABC Company sold machinery with carrying amount of P550,.000 for P800,000, which is the fair value of the asset on this date, and then immediately leased the machine back for P160,000 annually payable in advance for five years. The implicit rate is 12%. Using four decimal places as PV factors, which of the following will be part of the compound journal entry ABC Company will prepare on January 1, 2021? * O Debit Cash, P800,000 O Credit Lease liability, P645,968 O Credit Gain on Sale-Leaseback, P48,315 O Debit Right-of-Use Machinery, P444,103

On January 1, 2021, ABC Company sold machinery with carrying amount of P550,.000 for P800,000, which is the fair value of the asset on this date, and then immediately leased the machine back for P160,000 annually payable in advance for five years. The implicit rate is 12%. Using four decimal places as PV factors, which of the following will be part of the compound journal entry ABC Company will prepare on January 1, 2021? * O Debit Cash, P800,000 O Credit Lease liability, P645,968 O Credit Gain on Sale-Leaseback, P48,315 O Debit Right-of-Use Machinery, P444,103

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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