BNM Itd. Acquired on asset of Rs. 440,000 through a finance lease agreement on 1-1-2018 with no residual value. The lease term is five years with annual lease rentals of Rs .100,000 payable at the start of each year. The implicit rate of interest is 10% . Calculate: a. Gross investment in lease b. Net investment in lease c. Unearned finance income d: Lease amortization schedule

BNM Itd. Acquired on asset of Rs. 440,000 through a finance lease agreement on 1-1-2018 with no residual value. The lease term is five years with annual lease rentals of Rs .100,000 payable at the start of each year. The implicit rate of interest is 10% . Calculate: a. Gross investment in lease b. Net investment in lease c. Unearned finance income d: Lease amortization schedule

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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Answer is $1,818 Please explain the reasoning and calculations
BNM Itd. Acquired on asset of Rs. 440,000 through a finance lease agreement pn 1-1-2018 with no residual value. The lease term is five years with annual lease rentals of Rs. 100,000 payable at the start of each year. The implicit rate of interest is 10%. Calculate: al Gross investment in lease b. Net investment in lease C. Uneared finance income Lease amortization schedule d.
Date of commencement of lease - July 1, 2022 Duration of lease - 8 years Implicit rate of interest - 6% Initial up-front payment - P200,000 Lease payments at the end of each year - P100,000
am. 101.
*see attached What is the total unearned interest income? a. 3,052,705b. 2,652,705c. 2,252,705d. 6,000,000
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Recording Lease ObligationsE17B. Business Application ▶ Soong Corporation has leased a piece of equipmentthat has a useful life of 12 years. This capital lease requires payments of $43,000 per yearfor 12 years. Soong currently is able to borrow money at a long-term interest rate of8 percent. (Round to the nearest dollar.)1. Calculate the present value of the lease.2. Prepare the journal entry to record the lease agreement.3. Prepare the journal entry to record depreciation of the equipment for the first yearusing the straight-line method.4. Prepare the journal entries to record the lease payments for the first two years.
BNM Itd. Acquired on asset of Rs. 440,000 through a finance lease agreement pn 1-1-2018 with no residual value. The lease term is five years with annual lease rentals of Rs. 100,000 payable at the start of each year. The implicit rate of interest is 10%. Calculate: a. Gross investment in lease b. Net investment in lease C. Unearned finance income d. Lease amortization schedule