Reference no: EM133114832

Questions -

Q1) Nayda Corporation (the lessee) leases a forklift from PMB Leasing Corp. (the lessor). The lease, signed on January 1, 2019, specifies that PMB grants right-of-use of the forklift to Nayda Corporation. The lease terms are as follows:

1. Lease is non-cancelable, term of four years, equal rental payments of P11,182.24 at the beginning of each year (annuity-due).

2. Forklift has a fair value of P40,000, economic life of four years, and no residual value.

3. Cost of forklift on PMB's books is P30,000.

4. No renewal options. forklift reverts to PMB. Implicit rate of lessor is 8 percent and is known by Nayda Corporation.

Required - Prepare Journal Entries for both the Lessor and the Lessee from lease commencement until last lease payment. Also, show solutions of arrived amounts in good form.

Q2) Nayda Corporation (the lessee) leases a forklift from PMB Leasing Corp. (the lessor). The lease, signed on January 1, 2019, specifies that PMB grants right-of-use of the lift to Nayda Corporation. The lease terms are as follows:

1. Lease is non-cancelable, term of four years, equal rental payments of P9,538.39 at the beginning of each year (annuity-due)

2. Forklift has a fair value of P40,000, economic life of six years, and residual value of P8,000 (unguaranteed).

3. Cost of forklift on PMB's books is P30,000.

4. No renewal options. Forklift reverts to PMB. Implicit rate of lessor is 8 percent and is known by Nayda Corporation.

Required - Journal Entries for both the Lessor and the Lessee from lease commencement until last lease payment. Also, show solutions of arrived amounts in good form.