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On December 31, 2021, Maroon Co. leased an equipment with a cot of P2,000,000 to Green Co. for 5 years, which is also the useful life of the asset. The lease agreement specifies equal annual payments of P495,381 beginning on December 31, 2021. On the same date, Maroon Co. paid P65,687 incremental costs that are directly attributable to negotiating and arranging a lease. The rate implicit in the lease is 12% but after considering the initial direct cost, the implicit rate is adjusted at 10%. How much is the total interest income in 2022?

On December 31, 2021, Maroon Co. leased an equipment with a cot of P2,000,000 to Green Co. for 5 years, which is also the useful life of the asset. The lease agreement specifies equal annual payments of P495,381 beginning on December 31, 2021. On the same date, Maroon Co. paid P65,687 incremental costs that are directly attributable to negotiating and arranging a lease. The rate implicit in the lease is 12% but after considering the initial direct cost, the implicit rate is adjusted at 10%. How much is the total interest income in 2022?

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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On December 31, 2021, Maroon Co. leased an equipment with a cot of P2,000,000 to Green Co. for 5 years, which is also the useful life of the asset. The lease agreement specifies equal annual payments of P495,381 beginning on December 31, 2021. On the same date, Maroon Co. paid P65,687 incremental costs that are directly attributable to negotiating and arranging a lease. The rate implicit in the lease is 12% but after considering the initial direct cost, the implicit rate is adjusted at 10%. How much is the total interest income in 2022?
Transcribed Image Text:On December 31, 2021, Maroon Co. leased an equipment with a cot of P2,000,000 to Green Co. for 5 years, which is also the useful life of the asset. The lease agreement specifies equal annual payments of P495,381 beginning on December 31, 2021. On the same date, Maroon Co. paid P65,687 incremental costs that are directly attributable to negotiating and arranging a lease. The rate implicit in the lease is 12% but after considering the initial direct cost, the implicit rate is adjusted at 10%. How much is the total interest income in 2022?
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