Meg Company leased equipment from Wee Company on July 1, 2021 for an eight-year period expiring June 30, 2029. Equal payments under the lease are P600,000 and are due on July 1 of each year. The first payment was made on July 1, 2021. The rate of interest contemplated by Meg and Wee is 10%. The cash selling price of the equipment is P3,520,000 and the cost is P2,800,000. The lease is appropriately recorded as a sales type lease.

Meg Company leased equipment from Wee Company on July 1, 2021 for an eight-year period expiring June 30, 2029. Equal payments under the lease are P600,000 and are due on July 1 of each year. The first payment was made on July 1, 2021. The rate of interest contemplated by Meg and Wee is 10%. The cash selling price of the equipment is P3,520,000 and the cost is P2,800,000. The lease is appropriately recorded as a sales type lease.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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