Robbins, Inc., leased a machine from Ready Leasing Co. The lease requires 10 annual payments of P10,000 beginning immediately. The lease specifies an interest rate of 12% and a purchase option of P10,000 at the end of the tenth year, even though the machine’s estimated value on that date is P20,000. It reasonably certain that Robbins will exercise the purchase option. Robbins’ incremental borrowing rate is 14%. What amount should Robbins record the right-of-use asset at the beginning of the lease term?
4. Robbins, Inc., leased a machine from Ready Leasing Co. The lease requires 10 annual payments of P10,000 beginning immediately. The lease specifies an interest rate of 12% and a purchase option of P10,000 at the end of the tenth year, even though the machine’s estimated value on that date is P20,000. It reasonably certain that Robbins will exercise the purchase option. Robbins’ incremental borrowing rate is 14%. What amount should Robbins record the right-of-use asset at the beginning of the lease term?
5. On January 1, 20x7, Babson, Inc., leased two automobiles for executive use. The lease requires Babson to make five annual of P13,000 beginning January 1, 20x7. At the end of the lease term, Babson guarantees the residual value of the automobiles will total P10,000. The interest rate implicit in the lease is 9%. Babson's recorded lease liability on initial
6. On January, 20x8, Harrow Co. as lessee signed a five-year non-cancelable equipment lease with annual payments of P100,000, beginning December 31, 20x8. The implicit interest rate is 10%. How much is the interest expense for the year ended December 31, 20x8?
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