How much will be the total income to be recognized on December 31, 2020 arising from the lease transactions?

Prepare the amortization table and determine the balance of the unearned interest income on December 31, 2021.

How much is the lease receivable balance of December 31, 2022?

PROBLEM 6 Sweet Company adopted the policy of leasing as the primary method of selling products. The entity's main product is a small cargo vessel. Sweet Company constructed such a cargo vessel for Bitter Company at a cost of Php 8,500,000 The terms of the lease provided for annual advance payments of Php 2,500,000 to be paid over 10 years with the ownership transferring to Bitter Company at the end of the lease period. It is estimated that the cargo vessel will have a residual value of Php 1,600,000 at that date. The lease payments began at the beginning of year 2020. Sweet Company incurred initial direct costs of Php 500,000 in financing the lease agreement with Bitter Company. The sale price of the cargo vessel is Php 14.875,000. Financing in the construction was at a 14% rate. The present value of an annuity due at 14% for 10 periods is 5.95