An asset with a market value of P1,000,000 is leased on January 1, 2019. Five annual lease payments are due each December 31 beginning December 31, 2019. The guaranteed residual value on December 31, 2023, the last day of the lease term, is P400,000. The lessor's implicit interest rate is 8%. What is the annual lease payment? A. P200,000 B. P182,456 C. P168,910 D. P120,000
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An asset with a market value of P1,000,000 is leased on January 1, 2019. Five annual lease payments are due each December 31 beginning December 31, 2019. The guaranteed residual value on December 31, 2023, the last day of the lease term, is P400,000. The lessor's implicit interest rate is 8%. What is the annual lease payment?
A. P200,000
B. P182,456
C. P168,910
D. P120,000
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- An asset with a market value of P1,000,000 is leased on January 1, 2019. Five annual lease payments are due each December 31 beginning December 31, 2019. The guaranteed residual value on December 31, 2023, the last day of the lease term, is P400,000. The lessor’s implicit interest rate is 8%. What is the annual lease payment? A.P200,000 B.P182,456 C.P168,910 D.P120,000Fact pattern On January 1, 2019, Lessee enters into a 4-year lease of an asset for an annual rent of P10,000 payable at the beginning of each year. The interest rate implicit in the lease is 10% while the lessee's incremental borrowing rate is 12%. 9. The initial measurement of the right-of-use asset is determined as follows: P10,000 x PV of an ordinary annuity of P1 @10%, n=4. 10. The initial measurement of the lease liability is determined as follows: P10,000 x PV of an annuity due of P1 @10%, n=4.CHOOSE THE CORRECT ANSWER FROM THE CHOICES An asset with a market value of P1,000,000 is leased on January 1, 2019. Five annual lease payments are due each December 31 beginning December 31, 2019. The guaranteed residual value on December 31, 2023, the last day of the lease term, is P400,000. The lessor’s implicit interest rate is 8%. What is the annual lease payment?A. P200,000 B. P182,456 C. P168,910 D. P120,000
- Ma4. On 01/07/2020, Messor enters into a lease of a machine for five years, with costs $100,000 at an annual rental of $25,000, paid in advance. The full residual value of 15,000 will be guaranteed at the date when this machine is returned. The interest rate implicit in the lease is 17%. How much is the interest portion in the payment at 01/07/2021? A. $25,000 B. $11,659 C. $12,822 D. $13,020 On 01/07/2020, Messor enters into a lease of a machine for five years, with costs $100,000 at an annual rental of $25,000, paid in advance. The full residual value of 15,000 will be guaranteed at the date when this machine is returned. What is the interest rate implicit in the lease? A. 10% B. 13% C. 6% D. 17%WITH SOLUTION/COMPUTATION 59. On December 30, 2019, Rafferty Corp. leased equipment. Annual lease payments of P20,000 are due December 31 for 10 years. The equipment’s useful life is 10 years, and the interest rate implicit in the lease is 10%. The present value of the lease payments on December 30, 2019 before the first lease payment is P135,000. The first lease payment was made on that date. What amount should Rafferty include in current liabilities for this lease in its December 31, 2019, balance sheet?a. 6,500 b. 8,500 c. 11,500 d. 20,000Date of commencement of lease - July 1, 2022 Duration of lease - 8 years Implicit rate of interest - 6% Initial up-front payment - P200,000 Lease payments at the end of each year - P100,000
- 11. On 1 July 2020, Sami Ltd leased a machine from Jimmy Ltd. The machine cost Jimmy Ltd OMR1,300,000 to manufacture and had a fair value of OMR1,541,090 on 1 July 2020. The lease agreement contained the following provisions: Lease term |4 years |Annual rental payment, in advance on 1 July each year OMR 415,000| Residual value at end of the lease term Residual guaranteed by lessee Interest rate implicit in lease The lease is cancellable only with the permission of the lessor. OMR 150,000 nil 8% The expected useful life of the machine is 6 years. Sami Ltd intends to return the machine to the lessor at the end of the lease term. Included in the annual rental payment is an amount of OMR15,000 to cover the costs of maintenance and insurance paid for by the lessor. Required A. Prepare the lease payment schedule for the lessee (show all workings); and B. Prepare the lease receipt schedule for the lessor (show all workings)Assume a firm enters into a finance lease on December 31, 2020. The lease liability at the inception of the lease is $52,000. The annual lease payment is $10,000, and the first payment is due immediately. Assuming an incremental borrowing rate of 6%, what is the lease liability on December 31, 2021? O $45,120 O $42,000 O $34,520 O $32,000 O $38,560STL enters into a 5-year lease of an item of plant on January 1, 2022. The annual rentals are P11.5 million, with the first installment paid on December 31, 2022. The present value of minimum lease payments are 50 million and the interest rate implicit in the lease is 5% per annum. Calculate the liability to be recognized in the Statement of Financial Position at December 31, 2023.
- Dadoe Enterprise enters into the lease of an item of plant on January 1, 2022. The annual rentals are P2.3 million, with payments made in arrears. The present value of minimum lease payments is P10 million and interest rate implicit in the lease is 5% per annum. Calculate the finance cost recognized in the statement of comprehensive income for the year ended December 31, 2023. a. P289,250 b. 410,000 c. 500,000 d. 385,000The following facts pertain to a noncancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee. Inception date: May 1, 2025 Annual lease payment due at the beginning of each year, beginning with May 1, 2025: $30,000 Bargain-purchase option price at end of lease term = $10,000 Lessor's implicit rate = 7% The lease term ends in FIVE years on April 30, 2030. What is the present value of the asset being leased? Recommendation: draw a timeline of the cash flows from the lessee to the lessor. Your Answer: AnswerA contract has been signed to lease a building at P30, 000 per year with an annual increase of P1, 000 for 5 years. Payments are to be made at the end of each year from now. The prevailing interest rate is 7%. What is the lump sum paid today would be equivalent to the 5-year lease payment plan? whats the correct answer a. P130, 652.59 b. P142, 470.28 c. P137.952.69 d. P157, 609.38