Maya Company leased equipment from Waya Company on July 1, 2020 for an eight -year period expiring June 30, 2028. Equal payment under the lease are P600,000 and are due on July 1 of each year. The first payment was made on July 1, 2020. The rate of interest contemplated by Maya and Waya is 10%. The cash selling price of the equipment is P3,520,000 and the carrying amount is P2,800,000. The lease is appropriately recorded as a sales type lease. What amount of profit on the sale should be recorded for year ended December 31, 2020?
Maya Company leased equipment from Waya Company on July 1, 2020 for an eight -year period expiring June 30, 2028. Equal payment under the lease are P600,000 and are due on July 1 of each year. The first payment was made on July 1, 2020. The rate of interest contemplated by Maya and Waya is 10%. The cash selling price of the equipment is P3,520,000 and the carrying amount is P2,800,000. The lease is appropriately recorded as a sales type lease. What amount of profit on the sale should be recorded for year ended December 31, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Maya Company leased equipment from Waya Company on July 1, 2020 for an eight -year period expiring June 30, 2028. Equal payment under the lease are P600,000 and are due on July 1 of each year. The first payment was made on July 1, 2020. The rate of interest contemplated by Maya and Waya is 10%. The cash selling price of the equipment is P3,520,000 and the carrying amount is P2,800,000. The lease is appropriately recorded as a sales type lease.
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