WITH SOLUTION/COMPUTATION 60. On January 2, 2019, Cole Co. signed an eight-year non-cancellable lease for a new machine, requiring P15,000 annual payments at the beginning of each year. The machine has a useful life of 12 years, with no salvage value. Title passes to Cole at the lease expiration date. Cole uses straight-line depreciation for all of its plant assets. Aggregate lease payments have present value on January 2, 2019, of P108,000, based on appropriate rate of interest. For 2019, Cole should record depreciation (amortization) expense for the leased machine at a. 0 b. 9,000 c. 13,500 d. 15,000
WITH SOLUTION/COMPUTATION 60. On January 2, 2019, Cole Co. signed an eight-year non-cancellable lease for a new machine, requiring P15,000 annual payments at the beginning of each year. The machine has a useful life of 12 years, with no salvage value. Title passes to Cole at the lease expiration date. Cole uses straight-line depreciation for all of its plant assets. Aggregate lease payments have present value on January 2, 2019, of P108,000, based on appropriate rate of interest. For 2019, Cole should record depreciation (amortization) expense for the leased machine at a. 0 b. 9,000 c. 13,500 d. 15,000
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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WITH SOLUTION/COMPUTATION
60. On January 2, 2019, Cole Co. signed an eight-year non-cancellable lease for a new machine, requiring P15,000 annual payments at the beginning of each year. The machine has a useful life of 12 years, with no salvage value. Title passes to Cole at the lease expiration date. Cole uses
straight-line
a. 0 b. 9,000 c. 13,500 d. 15,000
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