*see attachedWhat amount of interest income should be recognized by Ripple for the year ended December 31, 2020? a. 244,080b. 200,000c. 204,492d. 240,000 On January 1, 2020, Ripple Company entered into a lease agreementwith Gala Company for a machine which was carried on the accountingrecords of Ripple Company at Php2,000,000.Total payments under the lease which expires on December 31, 2029aggregate Php3,550,800 of which Php2,400,000 represents cost of themachine to Gala Company. Payments of Php355,080 are due eachJanuary 1 of each year.The interest rate of 10% which was stipulated in the lease is consideredfair and adequate compensation to Ripple Company.Gala Company expects the machine to have a 10-year life, no residualvalue and be depreciated on a straight line basis. The lease qualifiesas a sales type lease.

Lease means giving out the assets by lessor to lessee to use that assets in return of rent.…

Answered: *see attached What amount of interest…

*see attached What amount of interest income should be recognized by Ripple for the year ended December 31, 2020? a. 244,080 b. 200,000 c. 204,492 d. 240,000

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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

*see attached

What amount of interest income should be recognized by Ripple for the year ended December 31, 2020?
a. 244,080
b. 200,000
c. 204,492
d. 240,000

On January 1, 2020, Ripple Company entered into a lease agreement
with Gala Company for a machine which was carried on the accounting
records of Ripple Company at Php2,000,000.
Total payments under the lease which expires on December 31, 2029
aggregate Php3,550,800 of which Php2,400,000 represents cost of the
machine to Gala Company. Payments of Php355,080 are due each
January 1 of each year.
The interest rate of 10% which was stipulated in the lease is considered
fair and adequate compensation to Ripple Company.
Gala Company expects the machine to have a 10-year life, no residual
value and be depreciated on a straight line basis. The lease qualifies
as a sales type lease.

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