On January 1, 2021, Elle Company acquired a machine by signing a four-year lease. Annual rentals are payable at the beginning of each year starting January 1, 2021. The asset's useful life is 6 years, at the end of which the asset's scrap value is expected to be P80,000. Elle Company uses the straight-line method to depreciate this asset. The lessor's implicit interest rate, known to Elle is 10%. Elle appropriately recorded the machine and the related liability on January 1, 2021, at P697,380. How much is the periodic annual rental payment in the lease contract? (Use four decimal places)

On January 1, 2021, Elle Company acquired a machine by signing a four-year lease. Annual rentals are payable at the beginning of each year starting January 1, 2021. The asset's useful life is 6 years, at the end of which the asset's scrap value is expected to be P80,000. Elle Company uses the straight-line method to depreciate this asset. The lessor's implicit interest rate, known to Elle is 10%. Elle appropriately recorded the machine and the related liability on January 1, 2021, at P697,380. How much is the periodic annual rental payment in the lease contract? (Use four decimal places)

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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