On December 31, 2019, Lucas Corporation leased a building from Fort Company for a seven-year period expiring December 31, 2026. Equal annual payments of P2,000,000 are due on December 31 of each year, beginning with December 31, 2019. The lease is properly classified as a finance lease on Lucas's books. At the inception of the lease, Lucas paid P350,000 as commission to an agent and estimated that P400,000 will be paid to restore the property at the end of the lease term. The building has a useful life of 20 years at the inception of the lease. Lucas guaranteed a residual value of P200,000 at the end of the lease term. Assuming all payments are made on time and the rate implicit and effective is at 12%, the amount that should be reported by Lucas Corporation as the lease liability on its December 31, 2022, a financial statement is?

How much is the balance of the right-of-use asset as of December 31, 2022?

O P7,803,018

OP9,759,803

OP8,715,380

O P6,282.414

Answer rating: 100% (QA)

The answer to the first question is d P6282414 The amount that should be reported by Lucas Corporati... View the full answer