Integrity Company sold to AAA Company machinery costing P800,000 with accumulated depreciation of P200,000 for P500,000 which is also its fair value on January 1, 2021. Integrity immediately leaseback the machine for 5 years for an annual rental of P50,000 payable at the end of each lease year with the first payment on December 31, 2021. The implicit interest rate is 6%. %. (Round off the PV factor to two decimal places, then do not round off during the computation) What is the amount capitalized as rights-of- use machinery at the date of sale-leaseback? a. P500,000 b. P300,000 c. P252,600 d. P210,500
Integrity Company sold to AAA Company machinery costing P800,000 with accumulated depreciation of P200,000 for P500,000 which is also its fair value on January 1, 2021. Integrity immediately leaseback the machine for 5 years for an annual rental of P50,000 payable at the end of each lease year with the first payment on December 31, 2021. The implicit interest rate is 6%. %. (Round off the PV factor to two decimal places, then do not round off during the computation) What is the amount capitalized as rights-of- use machinery at the date of sale-leaseback? a. P500,000 b. P300,000 c. P252,600 d. P210,500
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
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 3MC: Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of...
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Integrity Company sold to AAA Company machinery costing P800,000 with
What is the amount capitalized as rights-of- use machinery at the date of sale-leaseback?
a. P500,000
b. P300,000
c. P252,600
d. P210,500
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