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15. Cello Co. sells a building, with carrying amount of P1,000,000, to Violin Co. for cash of P1,800,000, which is equal to the building's fair
15. Cello Co. sells a building, with carrying amount of P1,000,000, to Violin Co. for cash of P1,800,000, which is equal to the building's fair value at that date. At the same time, Cello Co. leases the building from Violin Co. for an annual payment of P120,000 (due at the end of each year) over a lease term of 18 years. The interest rate implicit in the lease is 4.5%. The transfer qualifies as a sale under PFRS 15. What amount of gain should Cello Co. recognize on the transaction? a. 800,000 b. 298,336 c. 151,467 d.o (Adapted - IFRS 16. IE11)
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