Question: On January 1, 20x1, Libra Co. leased equipment to Gemini, Inc. Information on the lease is shown below: Cost of equipment 1,200,000 Useful

On January 1, 20x1, Libra Co. leased equipment to Gemini, Inc. Information on the lease is shown below: • Cost of equipment 1,200,000 • Useful life of the equipment 5 years • Lease term 4 years • Annual rental payable at the end of each year 400,000 • Interest rate implicit in the lease 10% • Residual Value 80,000 The equipment will revert to Abet at the end of the lease term. Initial direct costs amounted to ?80,000. The lease qualifies for sales-type lease accounting. Assuming the residual value is unguaranteed: As of 01 January 20x1, how much is the: Total Interest Income

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