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Find what amount of profit on the sale and interest revenue

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Question 1: JP Co. leased equipment from Joe Corp. on July 1, year 1 for an eight-year period expiring June 30, year 9. Equal payments under the lease are 600,000 and are due on July 1 of each year. The first payment was made on July 1, year 1. The rate of interest contemplated by JP and Joe is 10%. The cash selling price of the equipment is 3,520,000, and the cost of the equipment on Joe's accounting records is 2,800,000. The lease is appropriately recorded as a sales-type lease. What is the amount of profit on the sale and interest revenue that Joe should record for the year ended December 31, year 1?

Reference no: EM132575828

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