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Direct Finance Lease – Lessor (PAS 17 and PFRS 16) Problem 18. On January 1,2011, SM leased an equipment to RFM Inc. with the following details: Cost of Machinery P3,760,100 Residual value – guaranteed 400,000 Useful life and lease term 4 years Implicit interest rate 10% Annual rental is payable in advance on January 1 Required: Based on the result of your audit, determine the following: ____________1. Annual Rental ____________2. Gross Receivable or Investment ____________3. Unearned Interest ____________4. Interest Income on 2011 ____________5. Carrying Value of Lease Receivable on January 1,2012

Direct Finance Lease – Lessor (PAS 17 and PFRS 16) Problem 18. On January 1,2011, SM leased an equipment to RFM Inc. with the following details: Cost of Machinery P3,760,100 Residual value – guaranteed 400,000 Useful life and lease term 4 years Implicit interest rate 10% Annual rental is payable in advance on January 1 Required: Based on the result of your audit, determine the following: ____________1. Annual Rental ____________2. Gross Receivable or Investment ____________3. Unearned Interest ____________4. Interest Income on 2011 ____________5. Carrying Value of Lease Receivable on January 1,2012

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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Direct Finance Lease – Lessor (PAS 17 and PFRS 16)
Problem 18. On January 1,2011, SM leased an equipment to RFM Inc. with the following details:
Cost of Machinery P3,760,100
Residual value – guaranteed 400,000
Useful life and lease term 4 years
Implicit interest rate 10%
Annual rental is payable in advance on January 1
Required: Based on the result of your audit, determine the following:
____________1. Annual Rental
____________2. Gross Receivable or Investment
____________3. Unearned Interest
____________4. Interest Income on 2011
____________5. Carrying Value of Lease Receivable on January 1,2012



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