18. Farm Co. leased equipment to Union Co. on July 1, 20x1, and properly recorded the sales-type lease at P135,000, the present value of the lease payments discounted at 10%. The first of eight annual lease payments of P20,000 due at the beginning of each year was received and recorded on July 3, 20x1. Farm had purchased the equipment for P110,000. What amount of interest revenue from the lease should Farm report in its 20x1 income statement? а. О O b. 5,500 c. 5,750 d. 6,750

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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18. Farm Co. leased equipment to Union Co. on July 1, 20x1, and properly recorded the sales-type lease at P135,000, the present value of the lease
payments discounted at 10%. The first of eight annual lease payments of P20,000 due at the beginning of each year was received and recorded on
July 3, 20x1. Farm had purchased the equipment for P110,000. What amount of interest revenue from the lease should Farm report in its 20x1 income
statement?
а. О
O b. 5,500
c. 5,750
d. 6,750
Transcribed Image Text:18. Farm Co. leased equipment to Union Co. on July 1, 20x1, and properly recorded the sales-type lease at P135,000, the present value of the lease payments discounted at 10%. The first of eight annual lease payments of P20,000 due at the beginning of each year was received and recorded on July 3, 20x1. Farm had purchased the equipment for P110,000. What amount of interest revenue from the lease should Farm report in its 20x1 income statement? а. О O b. 5,500 c. 5,750 d. 6,750
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