At the beginning of 2023, Eleana Company leased an equipment from a lessor with the following...

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At the beginning of 2023, Eleana Company leased an equipment from a lessor with the following pertinent information: 500,000 8 years Useful life of equipment 10 years Implicit interest rate 10% PV of an ordinary annuity of 1 for 8 periods at 10% 5.33 Present value of 1 for 8 periods at 10% 0.47 Annual rental payable at the end of each year Lease term The entity had the option to purchase the equipment at the at the expiration of the lease term by paying P500,000. There is reasonable certainty that the entity shall exercise the option. The entity incurred initial direct cost of P200,000. Questions: 1. What amount should be recorded as the initial direct cost of the right of use asset? 2. What amount should be recorded as interest expense for 2023? 4. What amount should be recorded as depreciation of the right of use asset for 2023? At the beginning of 2023, Eleana Company leased an equipment from a lessor with the following pertinent information: 500,000 8 years Useful life of equipment 10 years Implicit interest rate 10% PV of an ordinary annuity of 1 for 8 periods at 10% 5.33 Present value of 1 for 8 periods at 10% 0.47 Annual rental payable at the end of each year Lease term The entity had the option to purchase the equipment at the at the expiration of the lease term by paying P500,000. There is reasonable certainty that the entity shall exercise the option. The entity incurred initial direct cost of P200,000. Questions: 1. What amount should be recorded as the initial direct cost of the right of use asset? 2. What amount should be recorded as interest expense for 2023? 4. What amount should be recorded as depreciation of the right of use asset for 2023?

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