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What is the interest revenue that Technoid would report

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Question - Technoid Inc sells computer systems. Technoid leases computers to Lone Star Company, on January 1 2021 the manufacturing cost of the computers was 19 million.

This non-cancelable lease had the following terms

Lease Payments 3,402,858 semiannually, first payment at January 1, 2021, remaining payments at June 30 and December 31 each year

Lease term is 5 years (10 semiannual payments)

No residual Value, no purchase option

Economic life of equipment is 5 years

Implicit interest rate and lessee's incremental borrowing rate is 10% semi annually

Fair value of the computers at January 1, 2021 is $ 23 million

Required - What is the interest revenue that Technoid would report for this lease in its 2021 Income statement?

Reference no: EM133107560

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