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3. What is the total unearned interest income? a. 3,025,000 b. 2,750,000 c. 2,475,000 d. 6.000.000

3. What is the total unearned interest income? a. 3,025,000 b. 2,750,000 c. 2,475,000 d. 6.000.000

FINANCIAL ACCOUNTING
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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machine to Lessee Company. The machine had an original At the beginning of current year, Lessor Company leased a cost of P6,000,000. The lease term was five years and the The lease is properly classified as a direct financing lease. 11 / 19 66.7% Problem 13-7 (IAA) implicit interest rate on the lease was 15%. The annual lease payments of P1,750,000 are made e December 31. The machine reverts to Lessor at the end of the lease term, which time the residual value of the machine will P275,000. The residual value is unguaranteed. 1. At the commencement of the lease, what would be the net lease receivable on the part of the lessor? a. 6,275,000 ь. 8,750,000 c. 6,000,000 d. 5,725,000 2. What is the gross investment in the lease? a. 8,750,000 b. 9,025,000 c. 6,000,000 d. 8,475,000 3. What is the total unearned interest income? a. 3,025,000 b. 2,750,000 c. 2,475,000 d. 6,000,000 4. What is the interest income for the current year? a. 1,312,500 b. 1,353,750 900,000 d. C. 450,000 Doc
Transcribed Image Text:machine to Lessee Company. The machine had an original At the beginning of current year, Lessor Company leased a cost of P6,000,000. The lease term was five years and the The lease is properly classified as a direct financing lease. 11 / 19 66.7% Problem 13-7 (IAA) implicit interest rate on the lease was 15%. The annual lease payments of P1,750,000 are made e December 31. The machine reverts to Lessor at the end of the lease term, which time the residual value of the machine will P275,000. The residual value is unguaranteed. 1. At the commencement of the lease, what would be the net lease receivable on the part of the lessor? a. 6,275,000 ь. 8,750,000 c. 6,000,000 d. 5,725,000 2. What is the gross investment in the lease? a. 8,750,000 b. 9,025,000 c. 6,000,000 d. 8,475,000 3. What is the total unearned interest income? a. 3,025,000 b. 2,750,000 c. 2,475,000 d. 6,000,000 4. What is the interest income for the current year? a. 1,312,500 b. 1,353,750 900,000 d. C. 450,000 Doc
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