Jackie Chan Leasing signs an equipment lease contract with Chris Tucker on January 1, 2020. The following information pertains to the lease. Lease term Equipment's useful life Bargain option price Implicit rate, known by Chris Tucker Fair value of the asset at January 1, 2020 Estimated recoverable value at the end of 5 years Estimated residual value at the end of 6 years (a) 5 years 6 years P40,000 10% The cost of the asset to Jackie Chan Leasing is P600,000. Chris Tucker uses the sum-of-the years' digit method to depreciate this type of equipment. Annual lease payments are made at the beginning of each year, starting January 1, 2020. REQUIRED: ...(b) P600,000 P80,000 P20,000 Give the entries in the books of Chris Tucker for years 2020 and 2021 as a result of the lease contract. Give the entries in the books of Jackie Chan Leasing for years 2020 and 2021.
Jackie Chan Leasing signs an equipment lease contract with Chris Tucker on January 1, 2020. The following information pertains to the lease. Lease term Equipment's useful life Bargain option price Implicit rate, known by Chris Tucker Fair value of the asset at January 1, 2020 Estimated recoverable value at the end of 5 years Estimated residual value at the end of 6 years (a) 5 years 6 years P40,000 10% The cost of the asset to Jackie Chan Leasing is P600,000. Chris Tucker uses the sum-of-the years' digit method to depreciate this type of equipment. Annual lease payments are made at the beginning of each year, starting January 1, 2020. REQUIRED: ...(b) P600,000 P80,000 P20,000 Give the entries in the books of Chris Tucker for years 2020 and 2021 as a result of the lease contract. Give the entries in the books of Jackie Chan Leasing for years 2020 and 2021.
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 2E: Lessee Accounting with Payments Made at Beginning of Year Adden Company signs a lease agreement...
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TOPIC: LEASES
a. Give the entries in the books of Chris Tucker for years 2020 and 2021 as a result of the lease contract.
b. Give the entries in the books of Jackie Chan Leasing for years 2020 and 2021.
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