On January 1, 2018, Calloway Company leased a machine to Zone Corporation. The lease qualifies as a
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Question:
On January 1, 2018, Calloway Company leased a machine to Zone Corporation. The lease qualifies as a sales-type lease. Calloway paid $340,000 for the machine and is leasing it to Zone for $33,000 per year, an amount that will return 9% to Calloway. The present value of the lease payments is $340,000. The lease payments are due each January 1, beginning in 2018. What is the appropriate interest entry on December 31, 2018?
Multiple Choice
Cash | 27,630 | |
Interest receivable | 27,630 |
Cash | 30,600 | |
Interest revenue | 30,600 |
Interest receivable | 27,630 | |
Interest revenue | 27,630 |
Interest receivable | 30,600 | |
Interest revenue | 30,600 |
Related Book For
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson , Wayne Thomas
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