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Determine the increase or decrease in interest expense

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Question - On January 1, 2020, Lessee Company entered into a non-cancelable lease agreement to use a machine and pay year-end payments of P100,000 for 6 years at an implicit rate of 9%. On December 31, 2021, the lease payments were increased by P50.000. Which led to a re-adjusted implicit rate of 8%. Determine the increase (decrease) in interest expense in 2022 due to the modification of the lease.

Reference no: EM133071197

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