The following information pertains to an operating sale and leaseback of equipment by Cheerful Co. on December 31, 2019: Sales price P450, 000 Carrying amount 800,000 Monthly lease payment Fair market value 600,000 Estimated remaining life 10 years Lease term 5 years Annual rental P60, 000 Prevailing market rental for the same type of asset P75, 000 What amount of deferred loss on the sale should Cheerful report at December 31, 2020, assuming the prevailing market rate rent has yet to change?
The following information pertains to an operating sale and leaseback of equipment by Cheerful Co. on December 31, 2019: Sales price P450, 000 Carrying amount 800,000 Monthly lease payment Fair market value 600,000 Estimated remaining life 10 years Lease term 5 years Annual rental P60, 000 Prevailing market rental for the same type of asset P75, 000 What amount of deferred loss on the sale should Cheerful report at December 31, 2020, assuming the prevailing market rate rent has yet to change?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 2E: Lessee Accounting with Payments Made at Beginning of Year Adden Company signs a lease agreement...
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The following information pertains to an operating sale and leaseback of equipment by Cheerful Co. on December 31, 2019: Sales price P450, 000 Carrying amount 800,000 Monthly lease payment Fair market value 600,000 Estimated remaining life 10 years Lease term 5 years Annual rental P60, 000 Prevailing market rental for the same type of asset P75, 000 What amount of deferred loss on the sale should Cheerful report at December 31, 2020, assuming the prevailing market rate rent has yet to change?
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