Question
Canarise Company leased equipment to Fulton Inc. on January 1, 2016. The lease is for an eight year period expiring December 1, 2016. Canarsie had
Canarise Company leased equipment to Fulton Inc. on January 1, 2016. The lease is for an eight year period expiring December 1, 2016. Canarsie had purchased the equipment on December 29, 2015, 4,800,000. The lease is appropriately accounted for as a sales type lease by Canarsie. Assume that the present value at January 1, 2016, of all rent payments over the lease term discounted at a 10 percent interest rate was $5,280,000. What amount of interest revenue should Canarsie record in 2017 (the second year of lease period) as a result of the lease? (Show your work)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started