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What amount of interest income should Marquez record

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Question - Marquez Company leased equipment to Manalang, Inc. on January 1, 2019. The lease is for an 8-year period. The first eight equal annual payments of P600,000 was made on January 1, 2019. Marquez had purchased the equipment on December 29, 2018 for P3,600,000. The lease is appropriately accounted for as a sales-type lease by Marquez. Assume that the present value at January 1, 2019 of all rent payments over the lease term discounted at a 10% interest rate was P3,520,000. What amount of interest income should Marquez record in 2020 as a result of the lease?

Reference no: EM132938596

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