pany leased a new machine from Keriboomboom Company on January 1, 2016, under a lease with the following information: Annual rental payable at beginning of each lease year P400,000 Initial direct cost paid by the lessee 200,000 Lease term 10 years Useful life of machine 12 years Implicit interest rate 14% Daniel has the option to purchase the machine on January 1, 2016, by paying P500,000, which approximates the expected fair value of the machine on the option exercise date. On January 1, 2016, Daniel should record a capitalized leased asset at: Use 2 decimal points in computing for the PV

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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Daniel Company leased a new machine from Keriboomboom Company on January 1, 2016, under a lease with the following information: Annual rental payable at beginning of each lease year P400,000 Initial direct cost paid by the lessee 200,000 Lease term 10 years Useful life of machine 12 years Implicit interest rate 14% Daniel has the option to purchase the machine on January 1, 2016, by paying P500,000, which approximates the expected fair value of the machine on the option exercise date. On January 1, 2016, Daniel should record a capitalized leased asset at: Use 2 decimal points in computing for the PV

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