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What amount should be debited as cost of the machinery

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Question - At the current year-end, Kira Company purchased a machinery that it had been leasing under a finance arrangements.

The right of use asset and lease liability were originally recorded at P2,000,000.

At the time of the purchase, the accumulated depreciation on the rightof use asset was P800,000 and the remaining balance of the lease liability was P1,300,000.

The underlying asset was purchased for P1,440,000 cash.

Required - What amount should be debited as cost of the machinery on the date of purchase?

Reference no: EM133076940

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