Happy Company purchased a packing machine intended for leasing at a cost of P330,000. The machine was leased to Great Company on January 1, 2021, at an annual rental of P58,860 payable in advance over a period of 10 years. The lease qualifies as a direct financing lease. There is no expected residual value for the asset. Implicit interest rate is 16%. Happy Company uses the calendar year. What is the amount of interest revenue recognized in profit or loss by Happy Company for the years 2021 and 2022? A. P43,382 and P40,906 B. P52,800 and P51,830 C. P43,832 and P40,609 D. P52,800 and P51,380

Q: Bitag is a dealer in machinery. On January 1, 2023, a machinery was leased to another entity with…

A: A lease is an agreement or contract between two parties, in which one party provides its asset for…

Q: At January 1, 2021, Cafe Med leased restaurant equipment from Crescent Corporation under a nine-year…

A: Lease :— A lease is a contract outlining the terms under which one party agrees to rent an asset—in…

Q: Aileen Company acquired an equipment for P2,300,000. At the beginning of current year, the entity…

A: Present value of residual value = residual value  x present value factor = 200000 x 0.51 = P102,000

Q: On January 1, James Industries leased equipment to a customer for a five-year period, at which time…

A: Lease: A contractual agreement for an asset between two parties. The parties involved are lessee and…

Q: m D. Corp. decided to enter the leasing business. Dumbrique acquired a specialized packaging machine…

A: Annual lease payment can be calculated as the equivalent annual payment made for cost of equipment.

Q: Aileen Company acquired an equipment for P2,300,000. At the beginning of current year, the entity…

A: Present value of residual value = residual value  x present value factor = 200000 x 0.51 = P102,000

Q: Angelo Company decided to enter the leasing business. The entity acquired a specialized packaging…

A: Given information, Acquisition cost of the machine =P2,300,000 Residual value of the machine…

Q: Sheridan Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The…

A: Lease: It is a contractual agreement between two parties namely a lessor who is the owner of the…

Q: On January 1, 2017, Star Company leased a building to Cosmos Inc. under an operating lease for ten…

A: Star's net rental income for 2017  = Annual rent - real estate broker  fees

Q: At the beginning of its fiscal year, Lakeside Inc. leased office space to LTT Corporation under a…

A: Operating lease: This type of lease refers to the lease where the lessor permits the lessee to make…

Q: EQUIRED: a.) At what amount should Diana record the leased asset at January 1,2020? b.) Prepare the…

A: Lease Payment 86,680 Lease Term  5 year Unguaranteed Residual Value 50000 fair value of the…

Q: On March 1, 2021, Happy Company leased equipment to Great Company for a four-year period ending…

A: Calculation of gross investment: Gross rentals + absolute amount of residual value   Gross…

Q: At the beginning of 2021, Killion Co. leased furniture to GameStop under a seven-year operating…

A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…

Q: On March 20, 2021, Barnes Company purchased a machine for P2,400,000 for the purpose of leasing it…

A: Straight Line Method: This technique of calculating depreciation, which is the process of expensing…

Q: Happy Company uses lease as a means of selling its equipment. On July 1, 2021, the company leased a…

A: Carrying amount ::684000P ROU Asset Retained::606862P A.Difference::77,138P Proceeds received 792200…

Q: lpha Company was P1,377,480 which approximates the fair value on the lease date. The expected…

A: Lease payments are payments made by a lessee under a lease agreement to the lessor, who is the owner…

Q: ABC Company is engaged in leasing equipment. An equipment was delivered to a lessee on December…

A: Lease receivable for the lessor is calculated as sum total of Present Value of Annual Lease payments…

Q: On January 1, 2020, Paulina Co. leased an equipment from Gabriela Inc. for a period of 5 years.…

A: Lease liability = Present value of minimum lease payment + Bargain Purchase price paid   =…

Q: What is Daniel's right of use of asset at December 31, 2016?

A: Welington Company purchased a new machine for P4,800,000 on January 1, 2016 and leased the same to…

Q: On January 2, 2021, White company leased a machine by signing a 4-year lease contract. Annual…

A: The depreciation on the right of use assets is charged on a straight-line basis over the useful life…

Q: On January 1, 2020, Metlock Co. leased a building to Ivanhoe Inc. The relevant information related…

A: Date Account tittles Debit ($) Credit ($) 01-01-20 Building A/c 3,500,000        To Bank A/c…

Q: On April 1, 2021, Elle Company acquired a machine by signing a four-year lease. Annual rentals of…

A: Carrying amount of the machine::P62,45,450..... Salvage value :::P6,00,000.. Expense under Straight…

Q: On January 1, 2019, Inside Company purchased equipment at a cost of P5,000,000 with a useful life of…

A: solution given cost of equipment          =5000000   useful life    =10 years annual depreciation…

Q: half yearly payments of £74,000 in advance   -Note the Interest rate inherent in the lease is 3%…

A: Lease Accounting  Financial  lease Accounting, recording transaction in the books of leasee

Q: At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year…

A: 1. What will be the effect of the lease on Crescent’s earnings for the first year? Since it is a…

Q: On January 1, 2019, Steward Co. signed an 8-year non-cancelable lease for a new, machine, requiring…

A: Lease means giving out the assets by lessor to lessee to use that assets in return of rent.…

Q: January 1, 2022, Tiktok  Company leased a heavy equipment to be used in its construction business.…

A: The right-of-use asset refers to the asset taken on the lease by the lessee entity. It is recognized…

Q: Crane Company specializes in leasing large storage units to other businesses. Crane entered a…

A: Please refer amortization  schedule  last column to find values that  mentioned below

Q: On January 1, James Industries leased equipment to a customer for a five-year period, at which time…

A: Answer:

Q: a. Prepare the relevant journal entries in the first year of the lease. b. Prepare the relevant…

A: Leasee Magnitude Ltd  Term of Lease 3 years Use full life of Plant 7  years Lease Rental…

Q: To raise operating funds, Pepero Company sold its equipment on March 31, 2019 for P470,000 and…

A: Step 1 A leaseback is an arrangement in which the company that sells an asset can lease back that…

Q: At the beginning of current year, Jade Company purchased a new machine for P4,800,000 and leased it…

A: An operating lease is an agreement or arrangement for the use of an asset without any transfer of…

Q: Happy Company purchased a packing machine intended for leasing at a cost of P330,000. The machine…

A: In the books of Happy Company, Lease rental receivable will be accounted as a result of lease. This…

Q: Robert Company purchased a new machine for P8,000,000 on January 1, 2022 for the purpose of leasing…

A: Operating Profit- The profit made by an organization from its normal business operations is referred…

Q: Happy Company uses lease as a means of selling its equipment. On July 1, 2021, the company leased a…

A: Manufacturer's profit recognised by happy company:   Sales = Fair value as per problem             =…

Q: Crosley Company, a machinery dealer, leased a machine to Dexter Corporation on 1 January 2019. The…

A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…

Q: Rayleigh Company had an asset costing P 5,239,000. The asset was leased on January 1, 2020 to…

A: A lease is a contract between the parties that provides the right to use the asset for an agreed…

Q: Bryant leased equipment that had a retail cash selling price of $600,000 and a useful life of five…

A:

Q: At the beginning of its fiscal year, Lakeside Inc. leased office space to LTT Corporation under a…

A:

Q: Sunland Company specializes in leasing large storage units to other businesses. Sunland entered a…

A: GIVEN   te   Lease Payment   Interest (9%) onOutstanding Lease Receivable   Reduction ofLease…

Q: Herald Company is a dealer in equipment. On January 1, 2020, an equipment was leased to another…

A:

Q: On January 1, James Industries leased equipment to a customer for a five-year period, at which time…

A: Introduction:- A lease is a contract in which the user agrees to pay the owner for the use of an…

Q: On January 1, 2020, Bacarra Company leased an asset for a term of six years. Annual rentals of…

A: Net Investment in the lease Net investment in the lease is equal to  sum of the present value of…

Q: At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year…

A:

Q: At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year…

A: 1)   Effect of the lease on Café Med’s earnings for the first year  $…

Q: March 1, 2021, Astrid Corporation purchased an equipment for P500,000 with an estimated residual…

A: Lease revenue:::36,000P Lease Bonus:::P18,000.. Less: Insurance costs:::P8,000.. Less: Maintenance…

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.