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- Robin Company leased an office to Franky Company for a five-year term beginning January 1, 2020. Under the terms of the operating lease, rent for the first year is P 800,000 and rent for years 2 through 5 is P 1,250,000 per annum. However, as an inducement to enter the lease, Robin Company granted Franky Company the first six months of the lease rent-free. What amount should be reported as rental income for 2020? Show your solution.I MISS HIGH SCHOOL INC. leased a machine from ANYARE SA COLLEGE LTD. on January 01, 2019. The first annual payment was made on January 01, 2020. The machine has an economic life of six years. The lease agreement requires four annual payments of P33,000, including P3,000 annual payment for repairs and maintenance. At the end of the lease term, the machine will be returned to ANYARE SA COLLEGE LTD. A residual value in the amount of P5,000 has been guaranteed by I MISS HIGH SCHOOL INC. Interest implicit in the lease is 10% which is known to I MISS HIGH SCHOOL INC. For the year ended December 31, 2020, what would I MISS HIGH SCHOOL INC. record in relation to the lease? Round present value factors to five decimal places. a. An interest expense of P9,851. b. An interest expense of P0. c. An interest payable of P9,851. d. An interest payable of P7,836.I MISS HIGH SCHOOL INC. leased a machine from ANYARE SA COLLEGE LTD. on January 01, 2019. The first annual payment was made on January 01, 2020. The machine has an economic life of six years. The lease agreement requires four annual payments of P33,000, including P3,000 annual payment for repairs and maintenance. At the end of the lease term, the machine will be returned to ANYARE SA COLLEGE LTD. A residual value in the amount of P5,000 has been guaranteed by I MISS HIGH SCHOOL INC. Interest implicit in the lease is 10% which is known to I MISS HIGH SCHOOL INC.Round present value factors to five decimal places. How much annual depreciation expense should I MISS HIGH SCHOOL INC. record? a. P24,628 b. P16,419 c. P23,378 d. P15,585
- On July 1, 2019, the Manaow Corp., signs a 10-year non-cancelable lease agreement for a storage building owned by Del Inc. The following information pertains to the lease agreement. Annual rental payment is P750,000 beginning July 1, 2019. The rental payment includes P50,000 for taxes and insurance. The fair value of the building on July 1, 2019 is P4,478,000. The building has an estimated economic life of 12 years. Unguaranteed residual value at the end of 10 years is P150,000. Implicit rate is 12%. Under IFRS 16, how much is the impact of the lease transaction to the income statement of Manaow Corp. dated December 31, 2019? A.P495,271 B.P470,271 C.P433,357 D. P408,357On January 2, 2020, Guitar Company leased a warehouse to Violin Corporation under an operating lease for ten years at Php80,000 per year payable on the first day of each lease year. Guitar Company agrees to pay the lessee's relocation/moving cost as an incentive to Violin Corporation for entering into the new lease. The moving cost is Php6,000. What amount of rent income should Guitar Company recognize in its 2020 profit or loss? *On July 1, 2019, the Manaow Corp., signs a 10-year non-cancelable lease agreement for a storage building owned by Del Inc. The following information pertains to the lease agreement. ❖ Annual rental payment is P750,000 beginning July 1, 2019. The rental payment includes P50,000 for taxes and insurance. ❖ The fair value of the building on July 1, 2019 is P4,478,000. ❖ The building has an estimated economic life of 12 years. Unguaranteed residual value at the end of 10 years is P150,000. ❖ Implicit rate is 12%. Under IFRS 16, how much is the impact of the lease transaction to the income statement of Manaow Corp. dated December 31, 2019? A. P495,271 B. P470,271 C. P433,357 D. P408,357
- On January 1, 2019, Caswell Company signs a 10-year cancelable (at the option of either party) agreement to lease a storage building from Wake Company. The following information pertains to this lease agreement: 1. The agreement requires rental payments of $100,000 at the beginning of each year. 2. The cost and fair value of the building on January 1, 2019, is $2 million. The storage building has not been specialized for Caswell. 3. The building has an estimated economic life of 50 years, with no residual value. Caswell depreciates similar buildings according to the straight-line method. 4. The lease does not contain a renewable option clause. At the termination of the lease, the building reverts to the lessor. 5. Caswell’s incremental borrowing rate is 14% per year. Wake set the annual rental to ensure a 16% rate of return (the loss in service value anticipated for the term of the lease). Caswell knows the implicit interest rate. 6. Executory costs of $7,000 annually,…I MISS HIGH SCHOOL INC. leased a machine from ANYARE SA COLLEGE LTD. on January 01, 2019. The first annual payment was made on January 01, 2020. The machine has an economic life of six years. The lease agreement requires four annual payments of P33,000, including P3,000 annual payment for repairs and maintenance. At the end of the lease term, the machine will be returned to ANYARE SA COLLEGE LTD. and I MISS HIGH SCHOOL INC. guarantees a residual value of P5,000. Interest implicit in the lease is 10% which is known to I MISS HIGH SCHOOL INC. For the year ended December 31, 2020, what would I MISS HIGH SCHOOL INC. record in relation to the lease? Round present value factors to five decimal places. Use the same information in MC 30. How much annual depreciation expense should I MISS HIGH SCHOOL INC. record? a. P24,628 b. P16,419 c. P23,378 d. P15,58525. On January 1, 2019, Rapp company leased a new machine to Lake company. The lease expires on January 1, 2024. The annual rental is 900,000. Additionally on January 1, 2019, Lake company paid 500,000 to Rapp company as a lease bonus and 250,000 as a security deposit to be refunded upon the expiration of the lease. What amount should be reported as rent revenue for the current year?
- On January 1, 2019, Caswell Company signs a 10-year cancelable (at the option of either party) agreement to lease a storage building from Wake Company. The following information pertains to this lease agreement: 1. The agreement requires rental payments of $100,000 at the beginning of each year. 2. The cost and fair value of the building on January 1, 2019, is $2 million. The storage building has not been specialized for Caswell. 3. The building has an estimated economic life of 50 years, with no residual value. Caswell depreciates similar buildings according to the straight-line method. 4. The lease does not contain a renewable option clause. At the termination of the lease, the building reverts to the lessor. 5. Caswell’s incremental borrowing rate is 14% per year. Wake set the annual rental to ensure a 16% rate of return (the loss in service value anticipated for the term of the lease). Caswell knows the implicit interest rate. 6. Executory costs of $7,000 annually,…I MISS HIGH SCHOOL INC. leased a machine from ANYARE SA COLLEGE LTD. on January 01, 2019. The first annual payment was made on January 01, 2020. The machine has an economic life of six years. The lease agreement requires four annual payments of P33,000, including P3,000 annual payment for repairs and maintenance. At the end of the lease term, the machine will be returned to ANYARE SA COLLEGE LTD. and I MISS HIGH SCHOOL INC. guarantees a residual value of P5,000. Interest implicit in the lease is 10% which is known to I MISS HIGH SCHOOL INC. For the year ended December 31, 2020, what would I MISS HIGH SCHOOL INC. record in relation to the lease? Round present value factors to five decimal places. a. An interest expense of P9,851. b. An interest expense of P0. c. An interest payable of P9,851. d. An interest payable of P7,836.On April 1, 2022, the Bergify Corp., signs a 10-year non-cancelable lease agreement for a storage building owned by Knowie Inc. The following information pertains to the lease agreement: Annual rental payment is P750,000 beginning April 1, 2022. The rental payment includes P50,000 for taxes and insurance. The fair value of the building on April 1, 2022 is P4,478,000. The building has an estimated economic life of 12 years. Unguaranteed residual value at the end of 10 years is P150,000. Implicit rate is 12%. (Round off the PV factor to four decimal places, then do not round off during the computation)How much is the impact of the lease transaction to the income statement of Bergify Corp. dated December 31, 2022?
