obie 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?
obie 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?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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
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?
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