Reference no: EM132538849

On January 1, 2020, Bacarra Company leased an asset for a term of six years. Annual rentals of P500,000 is payable every yearend. The cost of the leased asset is P2,100,000. Initial direct costs paid by Bacarra totaled P6,360. The asset will revert to Bacarra at the end of the lease term, when its residual value would amount to P100,000.

Question 1: Assume it is a direct finance lease with an implicit rate of 12% and the residual value is guaranteed, how much is the interest income for 2020?

Question 2: Assume it is a direct finance lease with an implicit rate of 12% and the residual value is unguaranteed, how much is the net lease receivable as of yearend 2022?

Question 3: Assume it is a sales-type lease with an implicit rate of 10% and the residual value is guaranteed, how much should be credited to sales resulting from the lease?

Question 4: Assume it is a sales-type lease with an implicit rate of 10% and the residual value is guaranteed, how much is cost of sales resulting from the lease

Question 5: Assume it is a sales-type lease with an implicit rate of 10% and the residual value is guaranteed, how much is the net income from the lease to be reported in 2020?

Question 6: Assume it is a sales-type lease with an implicit rate of 10%, how much is the net lease receivable as of yearend 2020?

Question 7: Assume it is a sales-type lease with an implicit rate of 10% and the residual value is unguaranteed, how much should be credited to sales resulting from the lease?

Question 8: Assume it is a sales-type lease with an implicit rate of 10% and the residual value is unguaranteed, how much is cost of sales resulting from the lease?

Question 9: Assume it is a sales-type lease with an implicit rate of 10% and the residual value is unguaranteed, how much is the net income from the lease to be reported in 2020?

Question 10: Assume the residual value is unguaranteed and the fair value of the leased asset at the end of the lease term is P80,000, how much is the loss on finance lease?