Find What amount of interest revenue should be recorded

Assignment Help Financial Accounting

Reference no: EM132812965

On July 1, 2020, Yum Company leased equipment to Burger Company for an 8-year period. Equal payments under the lease are P600,000 and are due on July 1 each year. The first payment was made on July 1, 2020. The interest rate contemplated by Yum and Burger is 10%. The cash selling price of the equipment is P3,520,000 and the cost of the equipment on Yum Company's accounting records is P2,800,000. The lease is appropriately recorded as a sales type lease.

Problem 1: What amount of profit on sale should be recognized for the year-ended December 31, 2020?

Problem 2: Using Yum Company's data, what amount of interest revenue should be recorded for the year ended December 31, 2020?

Reference no: EM132812965

Questions Cloud

Compute amounts that reported as non-current liabilities : Compute the amounts that should be reported as non-current liabilities for deposits to be reported in the December 31, 2020 statement of financial position

Determine the firms in competitive markets : The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently incurring economic losses.

Oklahoma city bombing : Executive summary for the Oklahoma City Bombing. this incident from an ethical standpoint and highlight some of the concerns of tactics and safety

Discuss how organizations have faced the challenges : Search "scholar.google" or your textbook. Discuss how organizations have faced the challenges that incident handlers are challenged with in identifying.

Find What amount of interest revenue should be recorded : Yum Company leased equipment to Burger Company for an 8-year period. What amount of profit on sale should be recognized for the year-ended December 31, 2020?

What are the reserve-deposit ratio : Assume that the monetary base is $2,000. Peple hold a third of their money in the form of currency and deposit two thirds with banks. The banks hold a third of

Discuss the areas of employee safety : Discuss the areas of employee safety that are most important to you. Do you feel the organization has the same concerns as you? Why? The response must be typed.

What happens to the number of workers employed : What happens to the number of workers employed after the tax is imposed.

How much is the annual rental for alcatel company : How much is the annual rental? Terms of the lease specify 4 year life for the lease, an annual interest rate of 15%, and 4-year-end rental payments.

User Account

All Pages