ABC Company leases out an equipment under direct finance lease. There is no residual value nor bargain purchase option. The entity wishes to earn 8% on a 5-year lease of equipment costing P3,234,000. First annual lease payment is payable immediately on the contract date on January 1, Year 1.  How much is the interest revenue for Year 1? (use three decimal places for the PV factors) A.P198,720 B.P258,720 C.P154,620 D.none

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.