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Problem 13-7 (IAA) implicit interest rate on the lease was 15%. each machine to Lessee Company. The machine had an origina cost of P6,000,000. The lease term was five years and the At the beginning of current year, Lessor Company leased The lease is properly classified as a direct financing least The machine reverts to Lessor at the end of the lease term, at 4. What is the interest income for the current year? The annual lease payments of P1,750,000 are made December 31. which time the residual value of the machine will be P275,000. The residual value is unguaranteed. 1. At the commencement of the lease, what would be the net lease receivable on the part of the lessor? a. 6,275,000 b. 8,750,000 c. 6,000,000 d. 5,725,000 2. What is the gross investment in the lease? a. 8,750,000 b. 9,025,000 c. 6,000,000 d. 8,475,000 3. What is the total unearned interest income? a. 3,025,000 b. 2,750,000 c. 2,475,000 d. 6,000,000 a. 1,312,500 b. 1,353,750 900,000 d. 450,000 c