Question
On January 1, 2020, Rio Company leased a building with the following provisions: Annual rentals payable in advance at the beginning of each year, starting
On January 1, 2020, Rio Company leased a building with the following provisions:
Annual rentals payable in advance at the beginning of each year, starting January 1, 2020 P250,000
Exercise price of the purchase option (reasonably certain to be exercised by the lessee) P200,000
Lease term 10 years
Economic life of the machine 15 years
Interest rate implicit in the lease 12%
1.What is the depreciation expense for the year 2020?
2. How much is the interest expense for the year 2020?
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College Accounting Chapters 1-13
Authors: John Price
14th Edition
007763991X, 9780077639914
