On June 1, 2019, Sorn Company signed a 10-year non-cancelable lease for a machine requiring annual payments at the beginning of each lease year. The machine has a useful life of 15 years without salvage value. Titlepasses to Sorn Company at the lease expiration date. Sorn Company’s accounting year ends on December 31 and it uses straight-line method of depreciation for all of its property, plant and equipment, computed to the nearest full month. Aggregate lease payments have a present value of P2,520,000 on June 1, 2019 based on an appropriate rate of interest. For the year 2019, what amount of depreciation expense should Sorn record for the leased machine? A. P252,000 B.P168,000 C.P147,000 D.P98,000
On June 1, 2019, Sorn Company signed a 10-year non-cancelable lease for a machine requiring annual payments at the beginning of each lease year. The machine has a useful life of 15 years without salvage value. Titlepasses to Sorn Company at the lease expiration date. Sorn Company’s accounting year ends on December 31 and it uses straight-line method of
A. P252,000
B.P168,000
C.P147,000
D.P98,000
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