CUPID Corporation leased equipment to a lessee on April 1, 2021 for an eight-year period expiring April 1, 2029. Equal payments under the lease are ₱600,000 and are due on April 1 of each year. The first payment was made on April 1, 2021. The list selling price of the equipment is ₱3,520,000 and the carrying amount is ₱2,800,000. The lease is appropriately accounted for as a sales-type lease. The present value of the lease payments is ₱3,300,000. What is the amount of profit on the sale that should be reported for 2021?
CUPID Corporation leased equipment to a lessee on April 1, 2021 for an eight-year period expiring April 1, 2029. Equal payments under the lease are ₱600,000 and are due on April 1 of each year. The first payment was made on April 1, 2021. The list selling price of the equipment is ₱3,520,000 and the carrying amount is ₱2,800,000. The lease is appropriately accounted for as a sales-type lease. The present value of the lease payments is ₱3,300,000. What is the amount of profit on the sale that should be reported for 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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5. CUPID Corporation leased equipment to a lessee on April 1, 2021 for an eight-year period expiring April 1, 2029. Equal payments under the lease are ₱600,000 and are due on April 1 of each year. The first payment was made on April 1, 2021. The list selling price of the equipment is ₱3,520,000 and the carrying amount is ₱2,800,000. The lease is appropriately accounted for as a sales-type lease. The present value of the lease payments is ₱3,300,000. What is the amount of profit on the sale that should be reported for 2021?
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