Jan K Jang. Inc entered into a lease contract on January 1, 2017 with Jude Jar Co. for a 6 year lease of a cold spring with a useful life of 8 years.  It was agreed that annual rental payable at the end of each year was Php 1,200,000  Because of the attractiveness of the cold spring, a payment was made by Jan K Jang Inc. to Jude Jar Co. to obtain the long-term lease: Php 200,000  Insurance, maintenance and taxes per year to be paid by Jan K Jang. Php 100,000  Initial direct cost incurred by JK Jang Inc. was Php 248,000  Unguaranteed residual value of the cold spring was Php 400,000  Cost of restoring the cold spring as required in the contract Php 800,000  The lease neither provides a transfer of title to the lessee nor a purchase option.  The implicit rate of the lease cannot be determined, but as inquired from Banko de Oro, the same financing can be obtained at the rate of 10% a. What is the current portion to be presented in the statement of financial position for the lease liability as of December 31, 2017? b. What is the noncurrent portion to be presented in the statement of financial position for the lease liability as of December 31, 2017? c. What is the carrying amount of the lease liability as of December 31, 2017? d. What is the accumulated depreciation on the right of use asset for 2018?

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 4P: Lessee Accounting Issues Timmer Company signs a lease agreement dated January 1, 2019, that provides...

See similar textbooks

Related questions

Concept explainers

Question

100%

Jan K Jang. Inc entered into a lease contract on January 1, 2017 with Jude Jar Co. for a 6 year lease of a cold spring with a useful life of 8 years.  It was agreed that annual rental payable at the end of each year was Php 1,200,000  Because of the attractiveness of the cold spring, a payment was made by Jan K Jang Inc. to Jude Jar Co. to obtain the long-term lease: Php 200,000  Insurance, maintenance and taxes per year to be paid by Jan K Jang. Php 100,000  Initial direct cost incurred by JK Jang Inc. was Php 248,000  Unguaranteed residual value of the cold spring was Php 400,000  Cost of restoring the cold spring as required in the contract Php 800,000  The lease neither provides a transfer of title to the lessee nor a purchase option.  The implicit rate of the lease cannot be determined, but as inquired from Banko de Oro, the same financing can be obtained at the rate of 10% a. What is the current portion to be presented in the statement of financial position for the lease liability as of December 31, 2017? b. What is the noncurrent portion to be presented in the statement of financial position for the lease liability as of December 31, 2017? c. What is the carrying amount of the lease liability as of December 31, 2017? d. What is the accumulated depreciation on the right of use asset for 2018?

Expert Solution

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions