Question
On December 31,2019, ABC Company leased equipment to DEF Company for a 4 year period ending December 31,2023. The equipment cost ABC Company P 365,760
On December 31,2019, ABC Company leased equipment to DEF Company for a 4 year period ending December 31,2023. The equipment cost ABC Company P 365,760 and has an estimated useful life of 5 years. Its normal sales price is P 365,760. The lessee guarantees a residual value of P 80,000. Lease payment is due every December 31 and DEF Company made the first payment on December 31,2019. ABC's implicit interest rate is 10%.
How much is the annual lease payment?
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Managerial Accounting for Managers
Authors: Eric Noreen, Peter Brewer, Ray Garrison
3rd edition
78025427, 978-0077736460, 007773646X, 978-0078025426
