On January 1, 2021, Leslie Company lease an equipment from Lestor Company. Information relating to the lease follows: Market value of equipment at inception of the lease--P2,000,000 Carrying amount of equipment at lease inception-------1,500,000 Useful life of equipment ----------------------------------   8 years Annual lease payment for 6 years every January 1,       startiing January 1, 2021---------------------------------418,000 Interest implicit in the lease --------------------------------   10% Leslie's incremental borrowing rate-------------------------    8% The lease term ends on December 31,2024.  Round off present value factor to three decimal places.  At what amount would Leslie Company record the right-of-use asset?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

On January 1, 2021, Leslie Company lease an equipment from Lestor Company. Information relating to the lease follows:
Market value of equipment at inception of the lease--P2,000,000
Carrying amount of equipment at lease inception-------1,500,000
Useful life of equipment ----------------------------------   8 years
Annual lease payment for 6 years every January 1, 
     startiing January 1, 2021---------------------------------418,000
Interest implicit in the lease --------------------------------   10%
Leslie's incremental borrowing rate-------------------------    8%

The lease term ends on December 31,2024.  Round off present value factor to three decimal places.  At what amount would Leslie Company record the right-of-use asset? 

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Lease accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education