What is the carrying amount of the right-of-use asset

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Reference no: EM133363190

Question: On December 31, 2023, Lessee Company signed a four-year noncancelable lease for the right of use of a new machine, requiring P150,000 annual payments beginning December 31, 2023. The machine has a useful life of 10 years with no salvage value. The rate implicit on the lease is 12%. Lessee Company has a bargain purchase option amounting to P30,000 and it is reasonably certain that the company will exercise this option. Requirements:

(a) Provide the journal entries from first year to last year of lease.

(b) Assuming the purchase option is not exercised, provide the journal entry for non-exercise.

(d) Determine the current and non-current portion of the lease liability as of the end of 2023, 2024, 2025, and 2026.

Reference no: EM133363190

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