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company leased a heavy machinery to another entity on January , 2020 with the following details: Cost of Equipment Residual Value unguaranteed Annual rental
company leased a heavy machinery to another entity on January , 2020 with the following details: Cost of Equipment Residual Value unguaranteed Annual rental payable in advance Useful life Lease term Implicit interest rate after initial direct cost 600,000.00 900,000.00 8 years 8 years 12% At the end of the lease term, the title of heavy machinery will be transferred to the lessee and not to E Dl SA PUSO MO company. The company also incurred initial direct cost of 300,000.00 for its heavy machinery. First lease payment will be on December 31 , 2020. What is the gross it-vestment What amount shcJId be as unearned interest inccn-e? What amount should be regurted as interest it-unme for 2020? What amount should be reported as interest imome for 2021? At the end of the lease term the. what if the fair market value of the residua' value is only 500.000.00_ hcn.' much is the Oss to be recognized?
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