Under leases How much is the interest expense forthe year 2021? *For numbers 3 to 5, please refer to the following problem:On January 1, 2021, GOBBLEGUT Corp. sold machinery costing P600,000 with an accumulateddepreciation of P250,000 for P1,000,000 which is also the fair value. The sale meets therequirements of PFRS 15. The remaining life of the machine is 5 years. GOBBLEGUT Corp.immediately leased the machine back for P200,000 yearly, payable in advance for 5 years. Theimplicit rate of interest is 12%.Round off PV factors to two decimal places.a. 72,960b. 91,492c. 96,895d. 120,000What is the cost of right-of-usecomputers? *For numbers 6 to 10, please refer to the following problem:On January 1, 2021, DIXIE KONG Corp. leased six computers for use of Accountancy Department.The lease period is five years, and the estimated economic life of the leased property is six years.The lease does not contain automatic title transfer and purchase option. Annal lease payments arepayable in advance every January 1 in the amount of P90,000. The incremental borrowing rate forDIXIE KONG Corp. is 12% and the implicit rate known to DIXIE KONG is 10%. The company usesstraight-line depreciation for this type of asset.Round off PV factors to two decimal places.а. 324,000b. 341,100с. 363,000d. 375,300

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How much is the interest expense for the year 2021? * For numbers 3 to 5, please refer to the following problem: On January 1, 2021, GOBBLEGUT Corp. sold machinery costing P600,000 with an accumulated depreciation of P250,000 for P1,000,000 which is also the fair value. The sale meets the requirements of PFRS 15. The remaining life of the machine is 5 years. GOBBLEGUT Corp. immediately leased the machine back for P200,000 yearly, payable in advance for 5 years. The implicit rate of interest is 12%. Round off PV factors to two decimal places. а. 72,960 b. 91,492 с. 96,895 d. 120,000

How much is the interest expense for the year 2021? * For numbers 3 to 5, please refer to the following problem: On January 1, 2021, GOBBLEGUT Corp. sold machinery costing P600,000 with an accumulated depreciation of P250,000 for P1,000,000 which is also the fair value. The sale meets the requirements of PFRS 15. The remaining life of the machine is 5 years. GOBBLEGUT Corp. immediately leased the machine back for P200,000 yearly, payable in advance for 5 years. The implicit rate of interest is 12%. Round off PV factors to two decimal places. а. 72,960 b. 91,492 с. 96,895 d. 120,000

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

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 10MC: On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring...

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