ABC Company is a manufacturer-dealer in equipment. On January 1, 2020, the entity leased an equipment to another entity. The lease is appropriately classified as a sales-type lease. The following information are available Annual rental payable 700,000 Lease term 8 years Useful life of equipment 10 years Cost of the equipment 2,800,000 Implicit interest rate 10% PV of an annuity due at 10% for 8 pds 5.87 PV of an ordinary annuity at 10% for 8 pds 534 PV of 1 at 10% for 8 periods 0.47 initial direct cost 50,000 Compute for what is asked: Compute for what is asked: The annual rental is paid at the end of every year and there is a residual value of 300,000. The asset will revert to the lessor at the end of the lease 1) Net investment at the beginning of the lease term 2) Unearned interest at the beginning of the lease term 3) Sales amount assuming that the residual value is unguaranteed 4) Cost of goods sold assuming the residual value is guaranteed 5) What is the amount of difference in the cost of goods sold using a guaranteed residual value versus an unguaranteed residual value? 6) How much cash will the seller receive upon return of the asset assuming the fair value at the time of return is P250,000 and the residual value is unguaranteed