Von Company leased a piece of equipment to Sam Company on April 1, 2021. The lease is appropriately recorded as a sale by Von. The lease is for an 8-year period ending March 31, 2029. The first of 8 equal annual payments of P175,000 (excluding executory costs) was made on April 1, 2021. The cost of the equipment to Von is P940,000. The equipment has an estimated useful life of 10 years with a guaranteed residual value of P100,000. At the end of the lease term, the leased equipment reverts to Von Company. The interest rate implicit in the lease is 10%. 1. How much is the total financial revenue (interest revenue) over the lease term? (Use four decimal places)
Von Company leased a piece of equipment to Sam Company on April 1, 2021. The lease is appropriately recorded as a sale by Von. The lease is for an 8-year period ending March 31, 2029. The first of 8 equal annual payments of P175,000 (excluding executory costs) was made on April 1, 2021. The cost of the equipment to Von is P940,000. The equipment has an estimated useful life of 10 years with a guaranteed residual value of P100,000. At the end of the lease term, the leased equipment reverts to Von Company. The interest rate implicit in the lease is 10%. 1. How much is the total financial revenue (interest revenue) over the lease term? (Use four decimal places)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Von Company leased a piece of equipment to Sam Company on April 1, 2021. The lease is appropriately recorded as a sale by Von. The lease is for an 8-year period ending March 31, 2029. The first of 8 equal annual payments of P175,000 (excluding executory costs) was made on April 1, 2021.
The cost of the equipment to Von is P940,000. The equipment has an estimated useful life of 10 years with a guaranteed residual value of P100,000. At the end of the lease term, the leased equipment reverts to Von Company. The interest rate implicit in the lease is 10%.
1. How much is the total financial revenue (interest revenue) over the lease term? (Use four decimal places)
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