On January 1, 2018, Money Co., a dealer of machines, leased a machine to For Nothing...

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On January 1, 2018, Money Co., a dealer of machines, leased a machine to For Nothing Co. Data relating to the lease is as follows: Cost of the machinery Useful life of equipment Lease term Annual rent payable at the end of the year Interest rate implicit in the lease Residual value guarantee Initial direct I cost P900,000 5 4 300,000 8% 50,000 10,000 The leased asset reverts to Money Co. at the end of the lease term. The lease is appropriately recorded as sales type lease. Based on the above data, answer the following: 1. How much is the total interest income to be earned over the lease term? 2. How much is the total interest income in 2018? 3. How much is the profit on sale on December 31, 2018? 4. Assuming the residual value decrease by $6,000, how much is the loss to be recognized in profit or loss at the end of the lease? On January 1, 2018, Money Co., a dealer of machines, leased a machine to For Nothing Co. Data relating to the lease is as follows: Cost of the machinery Useful life of equipment Lease term Annual rent payable at the end of the year Interest rate implicit in the lease Residual value guarantee Initial direct I cost P900,000 5 4 300,000 8% 50,000 10,000 The leased asset reverts to Money Co. at the end of the lease term. The lease is appropriately recorded as sales type lease. Based on the above data, answer the following: 1. How much is the total interest income to be earned over the lease term? 2. How much is the total interest income in 2018? 3. How much is the profit on sale on December 31, 2018? 4. Assuming the residual value decrease by $6,000, how much is the loss to be recognized in profit or loss at the end of the lease?

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1Total interest income to be earned over the lease term Lease ... View the full answer