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Prepare the necessary final entry

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Reference no: EM133150915

Question - The Company leased an equipment on January 1, 2019 with the following information:

Annual fixed payment paid at the beginning of the year P1,000,000

Initial direct cost pain on January 1, 2019 250,000

Lease incentive received 150,000

Residual value guarantee 300,000

Lease term 5 years

Useful life of the asset 6 years

Implicit interest rate 8%

Required -

a. Compute for the lease liability and right-of-use asset.

b. Prepare the amortization table.

c. At the end of the lease term, the fair value of the asset is P400,000. Prepare the necessary final entry.

Reference no: EM133150915

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