1. What is the cost of right of use asset?2. What is the gain on right transferred to the buyer-lessor? At the beginning of current year, Hazel Company sold a machine an immediately leased it back.The following data pertain to the sale and leaseback transaction:Sale price at below fair value4,000,0004,500,0003,600,000500,0003 years10 yearsFair value of machineCarrying amount of machineAnnual rental payable at the end of each yearLease termRemaining life of machineImplicit interest ratePresent value of an ordinary annuity of 1 at 6% for 3 periods6%2.67

Cost of right of use asset 1468000 Gain on right transferred to buyer-lessor 533000

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What is the cost of right of use asset? 2. What is the gain on right transferred to the buyer-lessor?

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

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 4C

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