Determine the amount of rent receivable to be recorded from the operating lease to Mt. Gethsemane on December 31, 2020.

Determine the annual rental of Mt. Zion.

How much will be reported as a total lease receivable from both of the lease transactions on December 31, 2020?

What amount shall be reported as the total income from all of the lease transactions on December 31, 2020

Compute for the carrying amount of the unearned interest income on December 31, 2020.

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PROBLEM 5 On January 1, 2020, Mt. Olives engaged in leasing the following: 1. Leased a building to Mt. Gethsemane under a four-year operating lease. The monthly rental for 2020. 2021, 2022 and 2023 is Php 200,000, Php 300,000, Php 400,000 and Php 500,000 respectively. Rentals are payable at the end of each month. All rental payments within the year were made when due. 2. Leased an equipment to Mt. Zion. Such an equipment was delivered to the lessee at the beginning of current year under a direct financing lease with the following provisions: Cost of Equipment Unguaranteed Residual Value Useful life and lease term Implicit interest rate Present value of an ordinary annuity of 1 for 8 years at 10% Present value of 1 for 8 years at 10% Php 8,722,400 400,000 8 years 10% 5.335 0.466 The annual rental is payable at the end of each year. The equipment will revert to the lessor upon the lessee expiration. PROBLEM 5 On January 1, 2020, Mt. Olives engaged in leasing the following: 1. Leased a building to Mt. Gethsemane under a four-year operating lease. The monthly rental for 2020. 2021, 2022 and 2023 is Php 200,000, Php 300,000, Php 400,000 and Php 500,000 respectively. Rentals are payable at the end of each month. All rental payments within the year were made when due. 2. Leased an equipment to Mt. Zion. Such an equipment was delivered to the lessee at the beginning of current year under a direct financing lease with the following provisions: Cost of Equipment Unguaranteed Residual Value Useful life and lease term Implicit interest rate Present value of an ordinary annuity of 1 for 8 years at 10% Present value of 1 for 8 years at 10% Php 8,722,400 400,000 8 years 10% 5.335 0.466 The annual rental is payable at the end of each year. The equipment will revert to the lessor upon the lessee expiration.

Answer rating: 100% (QA)

1 PV of an ordinary annuity of 1 for 4 years at 10 3169 PV of 1 for 4 years at 10 0611 Rent receivable from the operating lease to Mt Gethsemane on De... View the full answer