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On January 1, 2022, Lessee Company leased a machine with an estimated useful life of 10 years from lessor Company.  Lessee records the right of use asset in the amount of P1,650,000. The non-cancelable lease is 5 years, at the end of which Lessee will revert the asset to Lessor with a guaranteed residual value of P1,000,000. Lessee should depreciate the right-of-use asset over:     5 years 10 years 15 years 20 years

On January 1, 2022, Lessee Company leased a machine with an estimated useful life of 10 years from lessor Company.  Lessee records the right of use asset in the amount of P1,650,000. The non-cancelable lease is 5 years, at the end of which Lessee will revert the asset to Lessor with a guaranteed residual value of P1,000,000. Lessee should depreciate the right-of-use asset over:     5 years 10 years 15 years 20 years

Intermediate Accounting: Reporting And Analysis
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
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 6RE
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On January 1, 2022, Lessee Company leased a machine with an estimated useful life of 10 years from lessor Company.  Lessee records the right of use asset in the amount of P1,650,000. The non-cancelable lease is 5 years, at the end of which Lessee will revert the asset to Lessor with a guaranteed residual value of P1,000,000. Lessee should depreciate the right-of-use asset over:
 
 
5 years
10 years
15 years
20 years
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