The following items are related to the lease transaction between Tessie Company and Tessor Company: Commencement of the lease January 1, 2020 Annual lease payments payable in arrears every December 31 P400,000 Purchase option reasonably certain to be exercised by Tessie P322,113 Implicit rate to the lease 10% Lease term 5 years Useful life of the asset 10 years Initial Direct Costs incurred by Tessie P100,000 Lease bonus paid by Tessie to Tessor P50,000 The amount of lease liability Tessie is to recognize on January 1, 2020 is closest to
The following items are related to the lease transaction between Tessie Company and Tessor Company:
Commencement of the lease January 1, 2020
Annual lease payments payable in arrears every December 31 P400,000
Purchase option reasonably certain to be exercised by Tessie P322,113
Implicit rate to the lease 10%
Lease term 5 years
Useful life of the asset 10 years
Initial Direct Costs incurred by Tessie P100,000
Lease bonus paid by Tessie to Tessor P50,000
The amount of lease liability Tessie is to recognize on January 1, 2020 is closest to
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