Two years ago, the rental for the use of equipment and facilities as paid 5 years in advance, with option to renew the rent for another years by payment of P15,000 annually at the start of each year for renewal period. Now, the lessor asks the lessee If it could be possible to prepay the renewed 5 years period. If the lessee will consider the request, what would the fair prepayment to be made to the lessor if interest is now figured at 8%?
Two years ago, the rental for the use of equipment and facilities as paid 5 years in advance, with option to renew the rent for another years by payment of P15,000 annually at the start of each year for renewal period. Now, the lessor asks the lessee If it could be possible to prepay the renewed 5 years period. If the lessee will consider the request, what would the fair prepayment to be made to the lessor if interest is now figured at 8%?
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 10GI: Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6...
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Two years ago, the rental for the use of equipment and facilities as paid 5 years in advance, with option to renew the rent for another years by payment of P15,000 annually at the start of each year for renewal period. Now, the lessor asks the lessee If it could be possible to prepay the renewed 5 years period. If the lessee will consider the request, what would the fair prepayment to be made to the lessor if interest is now figured at 8%?
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