lade Company leases computer equipment to customers under direct financing lease. The equipment has no residual value at the end of the lease and the leases do not contain purchase option. Glade wishes to earn 8% interest on a five-year lease of equipment with a fair value of P323,400. The present value of an annuity due of P1 at 8% for 5 years is 4.312. What is the total amount of interest revenue that Glade will earn over the life of the lease? a. P51,600 b. P75,000 c. P129,360
lade Company leases computer equipment to customers under direct financing lease. The equipment has no residual value at the end of the lease and the leases do not contain purchase option. Glade wishes to earn 8% interest on a five-year lease of equipment with a fair value of P323,400. The present value of an annuity due of P1 at 8% for 5 years is 4.312. What is the total amount of interest revenue that Glade will earn over the life of the lease? a. P51,600 b. P75,000 c. P129,360
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Glade Company leases computer equipment to customers under direct financing lease. The equipment has no residual value at the end of the lease and the leases do not contain purchase option. Glade wishes to earn 8% interest on a five-year lease of equipment with a fair value of P323,400. The present value of an annuity due of P1 at 8% for 5 years is 4.312. What is the total amount of interest revenue that Glade will earn over the life of the lease?
a. P51,600
b. P75,000
c. P129,360
d. P139,450
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