What amount of interest revenue from the lease

Assignment Help Financial Accounting

Reference no: EM132775847

Problem 1: Farm Co. leased equipment to Union Co. on July 1, 20X4, and properly recorded the sales-type lease at $135,000, the present value of the lease payments discounted at 10%. The first of eight annual lease payments of $20,000 due at the beginning of each year was received and recorded on July 3, 20X4. Farm had purchased the equipment for $110,000. What amount of interest revenue from the lease should Farm report in its 20X4 income statement?

A. $0

B. $5,500

C. $5,750

D. $6,750

Reference no: EM132775847

Questions Cloud

What rig should report the gain as : The factory's remaining economic life is 20 years. The lease was reported appropriately as operating lease. At the time of sale, Rig should report the gain as?

Can futures price be negative : Can futures price be negative? If so, when and how does this happen?

What will be the carrying value of the machine at december : $30,000, has a useful life of 6 years and will be depreciated on a straight-line basis. What will be the carrying value of the machine at December 31, 20X2?

What is the npv of new video game : After one year, the estimate of remaining annual cash flow will either be revised upward to $940,000 or revised downward to $340,000.

What amount of interest revenue from the lease : Farm had purchased the equipment for $110,000. What amount of interest revenue from the lease should Farm report in its 20X4 income statement?

Are there quarterly grants available to nonprofit : Are there quarterly grants available to nonprofit organizations?

What sales are needed by sunland to break even : Sunland Company sells MP3 players for $50 each. Variable costs are $40 per unit, and fixed costs total $120000. What sales are needed by Sunland to break even?

Calculate the present value of the bond current yield : Also comment that how the present value of the bond will be affected if the yield to maturity will become same as a coupon rate.

What are the key accounting characteristics : What are the key accounting characteristics, assumptions, and principles that are used in the preparation of financial statements with example for each?

User Account

All Pages