16. Buttercup Company leased a property to Dickies Corporation on January 1, 2020 for a period of 8 years ending December 31, 2027. The first payment happened on January 1, 2020 amounting to P900,000. Buttercup Company had previously purchased the equipment for P4,800,000 from a supplier that Buttercup has been transacting with in the past years. Buttercup has been selling the same property on its ordinary course of business. The present value on January 1, 2020 of all rent payments over the lease term discounted at a 10% interest rate was P5,280,000. What amount of unearned interest revenue should be recognized as realized in 2021? * a. P490,000 b. P480,000 c. P438,000 O d. P391,800

16. Buttercup Company leased a property to Dickies Corporation on January 1, 2020 for a period of 8 years ending December 31, 2027. The first payment happened on January 1, 2020 amounting to P900,000. Buttercup Company had previously purchased the equipment for P4,800,000 from a supplier that Buttercup has been transacting with in the past years. Buttercup has been selling the same property on its ordinary course of business. The present value on January 1, 2020 of all rent payments over the lease term discounted at a 10% interest rate was P5,280,000. What amount of unearned interest revenue should be recognized as realized in 2021? * a. P490,000 b. P480,000 c. P438,000 O d. P391,800

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

16. Buttercup Company leased
a property to Dickies
Corporation on January 1,
2020 for a period of 8 years
ending December 31, 2027.
The first payment happened
on January 1, 2020 amounting
to P900,000. Buttercup
Company had previously
purchased the equipment for
P4,800,000 from a supplier
that Buttercup has been
transacting with in the past
years. Buttercup has been
selling the same property on
its ordinary course of
business. The present value on
January 1, 2020 of all rent
payments over the lease term
discounted at a 10% interest
rate was P5,280,000. What
amount of unearned interest
revenue should be recognized
as realized in 2021? *
a. P490,000
O b. P480,000
c. P438,000
O d. P391,800

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