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How much should be recognized as unearned interest revenue

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Question - On August 1, 2021, Argon Company leased a machine to Barium Company for a 6- year period requiring payments of P100,000 at the beginning of each year. Argon's implicit rate is 10% and present value factors are as follows:

PV of annuity due of P1 at 10% for 6 periods 4.791

PV of an annuity due of P1 at 10% for 8 periods 5.868

Argon appropriately recorded the lease as a direct financing lease. At the inception of the lease, how much should be recognized as unearned interest revenue at the inception of the lease?

Reference no: EM133137223

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