On January 1, 2019, Steward Co. signed an 8-year non-cancelable lease for a new, machine, requiring P60, 000 annual payments at the beginning of the year. Stewards borrowing rate is 10%. Present value of annuity of 10% for eight periods is 5.335 while the present value of 10% for eight periods in advance is 5,868. The machine has an estimated life of 12 years with no salvage value. Title passes to Steward at the lease expiration date. Steward used straight-line depreciation for all its plant assets. For 2019, Steward should record depreciation expense for the leased machine at 26,675 29,340 40,013 44,010
On January 1, 2019, Steward Co. signed an 8-year non-cancelable lease for a new, machine, requiring P60, 000 annual payments at the beginning of the year. Stewards borrowing rate is 10%. Present value of annuity of 10% for eight periods is 5.335 while the present value of 10% for eight periods in advance is 5,868. The machine has an estimated life of 12 years with no salvage value. Title passes to Steward at the lease expiration date. Steward used straight-line depreciation for all its plant assets. For 2019, Steward should record depreciation expense for the leased machine at 26,675 29,340 40,013 44,010
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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On January 1, 2019, Steward Co. signed an 8-year non-cancelable lease for a new, machine, requiring P60, 000 annual payments at the beginning of the year. Stewards borrowing rate is 10%. Present value of annuity of 10% for eight periods is 5.335 while the present value of 10% for eight periods in advance is 5,868. The machine has an estimated life of 12 years with no salvage value. Title passes to Steward at the lease expiration date. Steward used straight-line
26,675
29,340
40,013
44,010
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