What amount of interest revenue from the lease farm report

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Reference no: EM132806561

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: EM132806561

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