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)
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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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)
O P198,720
O P258,720
O P154,620
O none
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