Law Company leased a machine with a fair value of P 1,650,000 for a period of 5 years under a finance lease. The initial direct cost included in negotiating the lease amounted to P 12,500. The present value of the minimum lease payments discounted at the rate implicit in the lease is P 1,584,000. At what amount should the machine be recognized initially by Law Company? Show your solution

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Law Company leased a machine with a fair value of P 1,650,000 for a period of 5 years under a finance lease. The initial direct cost included in negotiating the lease amounted to P 12,500. The present value of the minimum lease payments discounted at the rate implicit in the lease is P 1,584,000. At what amount should the machine be recognized initially by Law Company? Show your solution.

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