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What amount of unearned interest revenue should recognized

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Question - Buttercup Company leased a property to Dickies Corporation on January 1, 2020 for a period of 8 years ending December 31, 2027. The first payment happened on January 1, 2020 amounting to P900,000. Buttercup Company had previously purchased the equipment for P4,800,000 from a supplier that Buttercup has been transacting with in the past years. Buttercup has been selling the same property on its ordinary course of business. The present value on January 1, 2020 of all rent payments over the lease term discounted at a 10% interest rate was P5,280,000. What amount of unearned interest revenue should be recognized as realized in 2021?

a. P490,000

b. P480,000

c. P438,000

d. P391,800

Reference no: EM133093499

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