On July 1, 2023, Oriole Corp., which uses IFRS, signs a 4-year, non-cancellable lease agreement to lease a equipment from Ivanhoe Ltd. The following information concerns the lease agreement. 1. 2. 3. 4. 5. 6. The equipment's fair value on July 1, 2023 is $275,000. The agreement requires equal rental payments of $57,700.00 beginning on July 1, 2023. The equipment has an estimated economic life of 5 years, with an unguaranteed residual value of $77,300. Oriole Corp. depreciates similar equipment using the straight-line method, with no residual value. The lease is non-renewable. At the termination of the lease, the equipment reverts to Ivanhoe. Oriole's incremental borrowing rate is 6% per year. The lessor's implicit rate is not known by Oriole Corp. The yearly rental payment includes $2,976.52 of executory costs related to insurance on the equipment.

On July 1, 2023, Oriole Corp., which uses IFRS, signs a 4-year, non-cancellable lease agreement to lease a equipment from Ivanhoe Ltd. The following information concerns the lease agreement. 1. 2. 3. 4. 5. 6. The equipment's fair value on July 1, 2023 is $275,000. The agreement requires equal rental payments of $57,700.00 beginning on July 1, 2023. The equipment has an estimated economic life of 5 years, with an unguaranteed residual value of $77,300. Oriole Corp. depreciates similar equipment using the straight-line method, with no residual value. The lease is non-renewable. At the termination of the lease, the equipment reverts to Ivanhoe. Oriole's incremental borrowing rate is 6% per year. The lessor's implicit rate is not known by Oriole Corp. The yearly rental payment includes $2,976.52 of executory costs related to insurance on the equipment.

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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