24. Roman Inc. sells computer systems. Roman leases computers to Rally Company on January 1, 2021. The manufacturing cost of the computers was $12 million This noncancelable lease had the following terms: • Lease payments: $2,466,754 semiannually, first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. Lease term: five years (10 semiannual payments) .No residual value, no purchase option. Economic life of equipment: five years. • Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually • Fair value of the computers at January 1, 2021: $20 million. What is the interest revenue that Roman would report for this lease in its 2021 income statement? A $0. B. $1,673,820 C. $876,662 D. None of these answer choices is correct.
24. Roman Inc. sells computer systems. Roman leases computers to Rally Company on January 1, 2021. The manufacturing cost of the computers was $12 million This noncancelable lease had the following terms: • Lease payments: $2,466,754 semiannually, first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. Lease term: five years (10 semiannual payments) .No residual value, no purchase option. Economic life of equipment: five years. • Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually • Fair value of the computers at January 1, 2021: $20 million. What is the interest revenue that Roman would report for this lease in its 2021 income statement? A $0. B. $1,673,820 C. $876,662 D. None of these answer choices is correct.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:24. Roman Inc. sells computer systems. Roman leases computers to Rally Company on January 1, 2021. The manufacturing cost of the computers was $12 million.
This noncancelable lease had the following terms:
• Lease payments: $2,466,754 semiannually, first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025.
• Lease term: five years (10 semiannual payments)
.No residual value; no purchase option.
Economic life of equipment: five years.
• Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually
• Fair value of the computers at January 1, 2021: $20 million.
What is the interest revenue that Roman would report for this lease in its 2021 income statement?
A $0.
B. $1,673,820
C. $876,662
D. None of these answer choices is correct.
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