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Find the lease receivables account balance

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Question - On August 1, 2012, Gabriel Company leased a machine to Baby Company for a six-year period requiring payments of P100,000 at the beginning of each year. The machine cost P480,000, which is the fair value at the lease date, and has a useful life of eight years with no residual value. Gabriel's implicit interest rate is 10% and present value factors are rounded off to three decimal places. Gabriel appropriately recorded the lease as a direct financing lease. At the inception of the lease, the lease receivables account balance should be?

a. P600,000

b. P586,800

c. P480,000

d. P479,100

Reference no: EM133090912

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