Zinc Co. leased equipment from Helium Company on July 1, 2018 for an 8- year period expiring June 30, 2026. Equal payments under the lease are P600,000 and are due on July 1 of each year. The first payment was made on July 1, 2018. The rate of interest contemplated by Zinc and Helium is 10%. The cash selling price of the equipment is P3,520,000 and the cost of the equipment on Helium's accounting records is P2,800,000. The lease is appropriately recorded as sales-type lease. What is the amount of interest revenue that Helium should record for the year ended December 31, 2018?
Zinc Co. leased equipment from Helium Company on July 1, 2018 for an 8- year period expiring June 30, 2026. Equal payments under the lease are P600,000 and are due on July 1 of each year. The first payment was made on July 1, 2018. The rate of interest contemplated by Zinc and Helium is 10%. The cash selling price of the equipment is P3,520,000 and the cost of the equipment on Helium's accounting records is P2,800,000. The lease is appropriately recorded as sales-type lease. What is the amount of interest revenue that Helium should record for the year ended December 31, 2018?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Zinc Co. leased equipment from Helium Company on July 1, 2018 for an 8-
year period expiring June 30, 2026. Equal payments under the lease are
P600,000 and are due on July 1 of each year. The first payment was made
on July 1, 2018. The rate of interest contemplated by Zinc and Helium is
10%. The cash selling price of the equipment is P3,520,000 and the cost of
the equipment on Helium's accounting records is P2,800,000. The lease is
appropriately recorded as sales-type lease. What is the amount of interest
revenue that Helium should record for the year ended December 31, 2018?
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