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problem 10-11 (AICPA Adapted) Al the beginning of current year, East Company leased a new Annual rental payable at beginning of each lense year chine from North Companywith the following information: 400.000 10 years 12 years 14% Lese terms reful life of machine plict interest rate Present value of an annuity of 1 in advance for 10 periods at 14% Present value of 1 for 10 periods at 14% 5.95 0.27 the expiration of the lease term by paying P500,000. The East Company has the option to purchase the machine upon purchase option is reasonably certain to be exercised. What is the initial cost of the right of use asset to be recognized by East Company? 2,515,000 b. 2,380,000 62,245,000 d. 1.980,000 + Problem 10-12 (IAA) On December 31, 2020, Tiger Company leased equipment from another entity with the following data: The estimated seven-year useful equipment life coincides with the lease term. The first of the seven equal annual P800,000 lease payments was paid on December 31, 2020. The implicit interest rate is 12%. Tiger's incremental borrowing rate is 14%. + Present values of an annuity of 1 in advance for seven periods are 5.11 at 12% and 4.89 at 14%. What amount should be recorded as initial measurement of the right use asset? a. 5,600,000 b. 4,088,000 C. 3,912,000 0 d