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What amount should halcyon report as interest expense

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Problem 1: On January 1, 2016, Halcyon Company, as lessee, signed a five-year non-cancellable equipment lease with annual payment of P1,000,000 beginning December 31, 2016. Halcyon treated this transaction as a finance lease. The five lease payments have a present value of P3,790,000 at January 1, 2016, based on interest of 10%. What amount should Halcyon report as interest expense for the year ended December 31, 2016?

Reference no: EM132729229

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