On January 1, 2020, Lessor Company leased a machinery to another entity with the following details:

Cost of machinery2,902,190

Residual value350,000

Lease term5 years

Useful life of machinery5 years

Implicit interest rate12%

PVF of 12% for 5 years0.5674

PVFOA of 12% for 5 years3.6048

 

There is neither a transfer of title nor a purchase option.

 

1. What is the unearned interest income on January 1, 2020?

2. What is the current portion of lease receivable on December 31, 2020?

3. What is the noncurrent portion of lease receivable on December 31, 2021?

4. What is the carrying amount of the lease receivable on December 31, 2023?

Answer rating: 100% (QA)

1 To calculate the unearned interest income on January 1 2020 we need to find the difference between the total lease payments and the present value of ... View the full answer