On December 31, 2012, BTS Company sold a machine to GOT Co and simultaneously leased it back for one year. The sales price of the machine was P480, 000, the carrying amount is P420,000, and it had an estimated remaining useful life of 14 years. The present value of the rental payments for one year is P35, 000. At December 31, 2019, how much should BTS Company report as deferred revenue from the sale of the machine?
On December 31, 2012, BTS Company sold a machine to GOT Co and simultaneously leased it back for one year. The sales price of the machine was P480, 000, the carrying amount is P420,000, and it had an estimated remaining useful life of 14 years. The present value of the rental payments for one year is P35, 000. At December 31, 2019, how much should BTS Company report as deferred revenue from the sale of the machine?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On December 31, 2012, BTS Company sold a machine to GOT Co and simultaneously leased it back for one year. The sales price of the machine was P480, 000, the carrying amount is P420,000, and it had an estimated remaining useful life of 14 years. The present value of the rental payments for one year is P35, 000. At December 31, 2019, how much should BTS Company report as deferred revenue from the sale of the machine?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education