On January 1, 2021, Feline Financing Co. leased equipment to Kuting, Inc. information on the lease is shown below: Cost of equipment: 1,200,000 Useful life of equipment: 5 years Lease term: 4 years Annual rental payable at the end of each year: 440,000 Additional information: The annual lease payment includes P36,196 pertaining to insurance taken by Feline on the equipment leased. Direct costs incurred by Feline in negotiating the lease amounted to P80,000. The implicit rate, after adjustment for the foregoing items, is 10%. How much is the net investment in the lease on January 1, 2021? 1,615,216 1,280,000 1,200,000 1,640,000 How much is the unearned interest income on January 1, 2021? 335,216 128,000 161,522
On January 1, 2021, Feline Financing Co. leased equipment to Kuting, Inc. information on the lease is shown below: Cost of equipment: 1,200,000 Useful life of equipment: 5 years Lease term: 4 years Annual rental payable at the end of each year: 440,000 Additional information: The annual lease payment includes P36,196 pertaining to insurance taken by Feline on the equipment leased. Direct costs incurred by Feline in negotiating the lease amounted to P80,000. The implicit rate, after adjustment for the foregoing items, is 10%. How much is the net investment in the lease on January 1, 2021? 1,615,216 1,280,000 1,200,000 1,640,000 How much is the unearned interest income on January 1, 2021? 335,216 128,000 161,522
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 6P: Sales-Type Lease with Unguaranteed Residual Value Lessor Company and Lessee Company enter into a...
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On January 1, 2021, Feline Financing Co. leased equipment to Kuting, Inc. information on the lease is shown below:
Cost of equipment: 1,200,000
Useful life of equipment: 5 years
Lease term: 4 years
Annual rental payable at the end of each year: 440,000
Additional information:
The annual lease payment includes P36,196 pertaining to insurance taken by Feline on the equipment leased. Direct costs incurred by Feline in negotiating the lease amounted to P80,000. The implicit rate, after adjustment for the foregoing items, is 10%.
How much is the net investment in the lease on January 1, 2021?
1,615,216
1,280,000
1,200,000
1,640,000
How much is the unearned interest income on January 1, 2021?
335,216
128,000
161,522
120,000
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