What amount should be included in current liabilities on Dec 31, 2021 in relation to the lease? **see attached pica. 65,000b. 85,000c. 115,000d. 200,000 On Dec. 31, 2021, Catpay Company leased equipment under a finance lease. Annuallease payments of Php200,000 are due Dec. 31 for 10 years. The equipment had auseful life of 10 years, and the interest rate implicit in the lease is 10%. The leaseobligation was recorded on Dec. 31, 2020 at Php1,350,000 and the first lease paymentwas made on that date.

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What amount should be included in current liabilities on Dec 31, 2021 in relation to the lease? * *see attached pic a. 65,000 b. 85,000 c. 115,000 d. 200,000

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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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

What amount should be included in current liabilities on Dec 31, 2021 in relation to the lease? *
*see attached pic
a. 65,000
b. 85,000
c. 115,000
d. 200,000

On Dec. 31, 2021, Catpay Company leased equipment under a finance lease. Annual
lease payments of Php200,000 are due Dec. 31 for 10 years. The equipment had a
useful life of 10 years, and the interest rate implicit in the lease is 10%. The lease
obligation was recorded on Dec. 31, 2020 at Php1,350,000 and the first lease payment
was made on that date.

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