Question: Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2018. The manufacturing cost of the computers was $12 million.
Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2018. The manufacturing cost of the computers was $12 million. This noncancelable lease had the following terms: Lease payments: $2,466,754 semiannually; first payment at January 1, 2018; remaining payments at June 30 and December 31 each year through June 30, 2022. Lease term: five years (10 semiannual payments). No residual value; no purchase option. Economic life of equipment: five years. Implicit interest rate and lessee's incremental borrowing rates% Fair value of the computers at January 1, 2018: $20 million. . semiannually 2) Technoid would account for this as: A) A finance lease. B) A sales-type lease without selling profit. C) A sales-type lease with selling profit. D) An operating lease. 3) What is the interest revenue that Technoid would report for this lease in its 2018 income statement? A)$0. B) $1,673,820 C) 5876,662
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