*see attachedWhat is the interest income for the current year? a. 1,297,905b. 1,357,905c. 900,000d. 870,168 At the beginning of current year, Lessor Company leased a machine toLessee Company. The machine had an original cost of Php6,000,000. Thelease term was five years and the implicit rate on the lease was 15%.The lease is properly classified as a direct financing lease. The annuallease payments of Php1,730,541 are made each December 31.The machine reverts to Lessor at the end of the lease term, at whichtime the residual value of the machine will be Php400,000. Theresidual value is unguaranteed.The PV of 1 at 15% for 5 periods is .4972, and the PV of an ordinary annuityof 1 at 15% for 5 periods is 3.3522.

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

Answered: *see attached What is the interest…

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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*see attached What is the interest income for the current year? a. 1,297,905 b. 1,357,905 c. 900,000 d. 870,168