What interest income to be recognized in the first year

Assignment Help Financial Accounting
Reference no: EM132791265

Lessor Company leases computer equipment to customers under direct financing leases. An item of equipment was leased to a lessee with the following provisions:

Annual rental payable in advance P500,000
Lease term and useful life of equipment 5 years
Cost of equipment P1,955,000
Initial direct cost P65,000

problem 1: The total interest income to be recognized over the lease term is:

a. P480,000        c. P545,000

b. P500,000          d. P273,700

problem 2: The interest income to be recognized in the first year of the lease is:

a. P242,400           c. P273,700

b. P182,400            d. P203,700

 

Reference no: EM132791265

Questions Cloud

What pressures do professional dancers face : What pressures do professional dancers face to reach the visual expectations of their audiences in live performance? In additional to physical form and movement
Find the cost of work in process at the end : The total costs of completed and transferred to finished goods stockroom for the month amounted to P40,000. Find the cost of work in process at the end
Creating new ideas for the athletic department : Creating new ideas for the athletic department. you will write the second of the three business memos that you will write for the course.
What film genre does your song suggest : View the Chicago Cityscape video. Note the different genres of film that each audio example suggests, even though the footage is identical.
What interest income to be recognized in the first year : What interest income to be recognized in the first year of the lease is and What The total interest income to be recognized over the lease term is
What is the standard error of the mean in this experiment : Nike's annual report says that the average customer buys 6.5 pairs of sports shoes per year. What is the standard error of the mean in this experiment
How much is the gain or loss on repossession : How much is the gain or loss on repossession? Rooster Co. repossessed a property that was sold in 20x1 for ?50,000. Total collections from the sale were ?24,000
Idea for prospective small business : Develop an idea for a prospective small business, and select a name for the company.
How much should the ordinary share capital : On December 1, DOS Corporation issued 1,000 shares of its par ordinary share capital. How much should the Ordinary Share Capital

Reviews

Write a Review

Financial Accounting Questions & Answers

  What method of depreciation does verizon use

What is the amount of depreciation expense reported for each of the last three years? What method of depreciation does Verizon use? What are the typical useful lives of Verizon's operating assets?

  Make the general journal entries to record the information

Prepare the general journal entries to record the information above for transactions that occurred during the year and additional information.

  Market value of equity-what is the value-to-ebita ratio

A firm has $600 market value of equity and $300 market value of debt. The firm also has $100 in nonconsolidated subsidiaries and $50 in excess cash. If the firm’s expected EBITA is $100, what is the value-to-EBITA ratio?

  Financial management goes far beyond accounting

What operational issues impact financial management? How can a business use efficiency to impact their profitability?

  Did cheese factorys cash balance increase or decrease

Did Cheese Factory's cash balance increase or decrease during the year ended August 31, 2015? Which financial statement shows the reasons for this change? What would Cheese Factory's 2015 net income have been had it given a 5 percent pay increase to ..

  What are the factors the company should a deferred tax asset

Determine What are the factors the company should consider before recognizing a deferred tax asset with respect to the tax loss incurred in the year?

  What is sharam industries cash conversion cycle

Sharam Industries has a 120-day operating cycle. If its average age of inventory is 50 days, how long is its average collection period? If its average payment period is 30 days, what is its cash conversion cycle?

  Compute the depreciation charge on this equipment

Compute the depreciation charge on this equipment for 2007, for 2014, and the total charge for the period from 2008 to 2013, inclusive, under each of the six following assumptions with respect to partial periods.

  Use job order costing to account for product

Describe how your chosen business might use job order costing to account for its product(s) or service(s). Explain the types of costs that would be classified as direct versus indirect, variable versus fixed, and product versus period.

  Determine the expected return of portfolio

Jack holds a portfolio with the following securities: Stock A 265,778 14.8%. Determine the expected return of portfolio

  Entry barnes company should make to accrue wages

Barnes Company has 20 employees who are each paid $80 per day for a 5-day workweek. The employees are paid each Friday. This year the accounting period ends on Tuesday. Prepare the December 31 year-end adjusting journal entry Barnes Company should ma..

  Which is a low value-added activity

Which one of the following is a low value-added activity? Plant maintenance./ Product delivery./ Order processing./ Customer service

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd