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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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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%. Uusing 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 Debit Right-of-Use Machinery, P444,103
Transcribed Image Text: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%. Uusing 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 Debit Right-of-Use Machinery, P444,103
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