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How much is the gross profit of the sales type lease

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Reference no: EM132760622

Question - On January 1, 2020, ECQ Company leased to China Company a Machinery in a Sales Type Lease with the following details:

Annual Rental payable at the end of each year 600,000

Lease Term and Useful Life 5 years

Cost of Machinery 750,000

Implicit Interest Rate 12%

Payment starts on December 31, 2020

Required -

1. How much is the Financial Revenue of the Sales Type Lease?

2. How much is the Gross Profit of the Sales Type Lease?

3. How much is the Carrying Amount of the Lease as of December 31, 2021?

4. How much is the Interest Income for 2021?

Reference no: EM132760622

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