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What amount of depreciation should be recognized

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Question - At the beginning of current year, Evita Company entered into an 8-year finance lease ford. 460,000 equipment.

The entity accounted for the acquisition of the finance lease at P5,000,000 which included aP200,000 purchase option. At the commencement date, the entity is not reasonably certain to exercise the purchase option. The expected fair value of the equipment is P400,000 at the end of the 10-year useful life. The straight line depreciation is used. What amount of depreciation should be recognized for the current year?

Reference no: EM133060253

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