PROBLEM 10-18 Please andswer all

Problem 10-18 (AICPA Adapted) an equipment from a lessor with the following pertinent At the beginning of current year, Eleana Company leased Annual rental payable at the end of each year information: Lease term Useful life of equipment Implicit interest rate 500,000 8 years 10 years 10% 0.47 PV of an ordinary annuity of 1 for 8 periods at 10% 5.33 Present value of 1 for 8 periods at 10% expiration of the lease term by paying P500,000. The entity has the option to purchase the equipment on the There is reasonable certainty that the entity shall exercise the option. The entity incurred initial direct cost of P200,000. 1. What is the initial cost of the right of use asset? a. 2,900,000 b. 3,100,000 2,865,000 d. c. 2. What is the interest expense for current year? a. 290,000 b. 310,000 c. 266,500 d. 316,500 3. What is the lease liability at year-end? a. 2,690,000 b. 2,790,000 c. 2,398,500 d. 2,848,500 4. What is the depreciation for current year? a. 310,000 b. 387,500 c. 290,000 d. 362,500 369