th an estimated life of 12 years and no residual value. The straight line depreciation is used. The implicit rate is 9%. What amount of interest income should be reported in the income statement for the current year? Show your sol
th an estimated life of 12 years and no residual value. The straight line depreciation is used. The implicit rate is 9%. What amount of interest income should be reported in the income statement for the current year? Show your sol
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
At the beginning of current year, Jimbie Company, as lessor, leased an equipment for ten years at an
annual rental of P 1,200,000, payable by Buggy Company, the lessee, at the beginning of each year. The
lease is appropriately accounted for as finance lease. The equipment had a cost of P 8,400,000 with an
estimated life of 12 years and no residual value. The straight line depreciation is used. The implicit rate is 9%.
What amount of interest income should be reported in the income statement for the current year? Show your
solution.
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