Lofton Company leased machinery to Cooney Company on July 1, 2017, for a ten-year period. Equal annual payments under the lease are $150,000 and are due on July 1 of each year. The first payment was made on July 1, 2017. The rate of interest used by Lofton and known to Cooney is 9%. The cash selling price of the machinery is $1,050,000 and the cost of the machinery on Lofton's accounting records was $930,000. Assuming that the lease is appropriately recorded as a sale for accounting purposes by Lofton, what amount of interest revenue would Lofton record for the year ended December 31, 2017? (LO 3)
(a). $94,500
(b). $81,000
(c). $40,500
(d). $0

Answer rating: 100% (QA)

c 40500 ... View the full answer