What is the total financial revenue to be recognized

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Problem 1: Kobie Company leased an equipment to a lessee on January 2, 2020 under a direct financing lease with the following provisions - cost of equipment P3,390,000; Annual rental payable at the end of the year P600,000; Useful life and lease term, 10 years. Kobie Company incurred and paid P143,400 in negotiation and arranging the lease. The present value of an ordinary annuity of 1 at 12% for 10 years is 5,650 and the present value of an ordinary annuity of 1 at 11% for 10 years is 5.889. What is the total financial revenue to be recognized over the lease term?

Reference no: EM132736262

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