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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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?
none
120,000
135,000
150,000
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