FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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https://www.bartleby.com/questions-and-answers/problem-4-at-the-beginning-of-current-year-enhypen-company-sold-an-equipment-with-remaining-useful-l/a60f292e-57d9-4073-b13d-e18c4987b1f4
above link answer's 1, 2, and 3 please answer the number 4
Transcribed Image Text:Problem 4
At the beginning of current year, Enhypen Company sold an equipment with remaining useful life of 10
years and immediately leased it back for 5 years.
Sales price at above falr value
Fair value of equipment
Carrying amount of equipment
Annual rental payable at the end of each year
Implicit interest rate
Present value of an ordinary annuity of 1 at 10% for 5 periods
5,700,000
5,000,000
4,500,000
500,000
10%
3.79
1. What amount should be recognized as initial lease liability?
2. What amount should be recognized as cost of right of use asset?
3. What amount should be recognized as cost of right of use asset?
4. What amount should be recognized as annual rental income of the buyer-lessor?
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