How much is the total expense to be recognized for year one

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Reference no: EM132819080

Use the following information for the next three items:

Lei Seg Co. (lessee) enters into a three-year lease of equipment. Lei Seg Co. agrees to make the following annual payments at the end of each year: P100,000 in year one, P120,000 in year two and P140,000 in year three. There are no other elements to the lease payments (e.g., purchase options, lease incentives from the lessor or initial direct costs). Lei Seg Co. uses its incremental borrowing rate of 4.235% because the interest rate implicit in the lease cannot be readily determined. Lei Seg Co. depreciates the right-of-use asset on a straight-line basis over the lease term. Note: Round off present value factors to four decimal places

Round off amounts to the nearest peso. Based on the information above, answer the following:

Problem 1. How much is the total expense to be recognized for year one?

Problem 2. What is the noncurrent portion of the lease liability at the end of year one?

Problem 3. What is the balance of the right of use asset at the end of year two?

Reference no: EM132819080

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