On January 1, 2021, DIXIE KONG Corp. leased six computers for use of Accountancy Department. The lease period is five years, and the estimated economic life of the leased property is six years. The lease does not contain automatic title transfer and purchase option. Annal lease payments are payable in advance every January 1 in the amount of P90,000. The incremental borrowing rate for DIXIE KONG Corp. is 12% and the implicit rate known to DIXIE KONG is 10%. The company uses straight-line depreciation for this type of asset.

On January 1, 2021, DIXIE KONG Corp. leased six computers for use of Accountancy Department. The lease period is five years, and the estimated economic life of the leased property is six years. The lease does not contain automatic title transfer and purchase option. Annal lease payments are payable in advance every January 1 in the amount of P90,000. The incremental borrowing rate for DIXIE KONG Corp. is 12% and the implicit rate known to DIXIE KONG is 10%. The company uses straight-line depreciation for this type of asset.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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