Reference no: EM132823850
Glad Company leased equipment to Joy Corp. on January 1, 2023 for an 8-year period expiring December 31, 2030. Equal payments under the lease are P600,000 and are due on December 31 of each year. The first payment was made on December 31, 2023. The rate of interest contemplated by Glad and Joy is 11%. The present value of the equipment is P3,087,674. Glad Company incurred a total transaction costs of P44,544 to negotiate the contract of lease. If the transaction cost is included the effective yield is 10.6%.
Problem 1: If the lease is accounted as a direct financing lease, _____ finance income should the lessor report in its 2025 statement of income.
Problem 1: If the lease is accounted as sales type lease, _____ is the carrying value of the lease rental receivable on December 31, 2025.
Problem 1: If the lease is accounted as a sales type lease, _____ is the initial carrying value of the lease rental receivable on January 1, 2025
Problem 1: If the lease is accounted as a sales type lease, _____ finance income should the lessor report in its 2025 statement of income.
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