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WITH SOLUTION/COMPUTATION 60. On January 2, 2019, Cole Co. signed an eight-year non-cancellable lease for a new machine, requiring P15,000 annual payments at the beginning of each year. The machine has a useful life of 12 years, with no salvage value. Title passes to Cole at the lease expiration date. Cole uses straight-line depreciation for all of its plant assets. Aggregate lease payments have present value on January 2, 2019, of P108,000, based on appropriate rate of interest. For 2019, Cole should record depreciation (amortization) expense for the leased machine at a. 0 b. 9,000 c. 13,500 d. 15,000

WITH SOLUTION/COMPUTATION 60. On January 2, 2019, Cole Co. signed an eight-year non-cancellable lease for a new machine, requiring P15,000 annual payments at the beginning of each year. The machine has a useful life of 12 years, with no salvage value. Title passes to Cole at the lease expiration date. Cole uses straight-line depreciation for all of its plant assets. Aggregate lease payments have present value on January 2, 2019, of P108,000, based on appropriate rate of interest. For 2019, Cole should record depreciation (amortization) expense for the leased machine at a. 0 b. 9,000 c. 13,500 d. 15,000

FINANCIAL ACCOUNTING
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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WITH SOLUTION/COMPUTATION   

60. On January 2, 2019, Cole Co. signed an eight-year non-cancellable lease for a new machine,  requiring P15,000 annual payments at the beginning of each year. The machine has a useful life of 12 years, with no salvage value. Title passes to Cole at the lease expiration date. Cole uses 
straight-line depreciation for all of its plant assets. Aggregate lease payments have present value on January 2, 2019, of P108,000, based on appropriate rate of interest. For 2019, Cole should  record depreciation (amortization) expense for the leased machine at
a.    0            b. 9,000            c. 13,500        d. 15,000

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