Problem 14-18 (IAA) On January 1, 2020, Dexter Company leased equipment to another entity. The lease is for an eight-year period expiring December 31, 2027. The first of eight equal annual payments of P900,000 was made on January 1, 2020. Dexter Company had previously purchased tne equipment for P4,800,000. The lease is appropriately accounted for as a sales type lease by Dexter Company. The present value on January 1, 2020 of all rent payments over the lease term discounted at a 10% interest rate was P5,280,000. What amount of interest revenue should be recorded in 2021? a 490,000 D. 480,000 = 438,000 1 391,800

Problem 14-18 (IAA) On January 1, 2020, Dexter Company leased equipment to another entity. The lease is for an eight-year period expiring December 31, 2027. The first of eight equal annual payments of P900,000 was made on January 1, 2020. Dexter Company had previously purchased tne equipment for P4,800,000. The lease is appropriately accounted for as a sales type lease by Dexter Company. The present value on January 1, 2020 of all rent payments over the lease term discounted at a 10% interest rate was P5,280,000. What amount of interest revenue should be recorded in 2021? a 490,000 D. 480,000 = 438,000 1 391,800

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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