On January 1, 20x1, Sunset Co. leased a machine from April, Inc. Information on the lease is as follows: Annual rent P200,000 Lease term 10 years 12 years Useful life of machine Implicit interest rate Lessee's incremental borrowing rate 10% 11% Scenario 1: Rent due at beg. of year vs. Rent due at end. of year 1. How much are the carrying amounts of the right-of-use asset and lease liability on December 31, 20x1, if the rentals are due (1) at the beginning of each lease year and (2) at the end of each lease year? Rent due at beginning Lease liability 1,216,625 1,151,804 1,266,986 1,106,022 Rent due at end Lease liability Right-of-use asset 1,151,804 1,216,625 1,106,022 Right-of-use asset 1,266,986 a. 1,106,022 b. 1,266,986 1,106,022 1,216,625 1,151,804 C. 1,151,804 d. 1,266,986 1,216,625
On January 1, 20x1, Sunset Co. leased a machine from April, Inc. Information on the lease is as follows: Annual rent P200,000 Lease term 10 years 12 years Useful life of machine Implicit interest rate Lessee's incremental borrowing rate 10% 11% Scenario 1: Rent due at beg. of year vs. Rent due at end. of year 1. How much are the carrying amounts of the right-of-use asset and lease liability on December 31, 20x1, if the rentals are due (1) at the beginning of each lease year and (2) at the end of each lease year? Rent due at beginning Lease liability 1,216,625 1,151,804 1,266,986 1,106,022 Rent due at end Lease liability Right-of-use asset 1,151,804 1,216,625 1,106,022 Right-of-use asset 1,266,986 a. 1,106,022 b. 1,266,986 1,106,022 1,216,625 1,151,804 C. 1,151,804 d. 1,266,986 1,216,625
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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