How much loss should be deferred beyond

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Reference no: EM132785403

problem 1: To raise operating funds, Pepero Company sold its equipment on March 31, 2019 for P470,000 and immediately leased the equipment back. The fair value of the asset is P700,000 and the equipment has a carrying value of P650,000. The annual rental payments of P100,000 is significantly lower than the fair rental of P125,000 for this type of equipment. Lease term is 12 years out of total life of 25 years. How much loss should be deferred beyond 2019 as a result of this leaseback transaction?

Option 1: 11,250

Option 2: 168,750

Option 3: 180,000

Option 4: 52,500

Reference no: EM132785403

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