Meg Company leased equipment to Wee Company on January 1,2020 for an eight year period.

F1 Problem 39-5 (AICPA Adapted) Howe Company leased equipment to Kew Company on January 1, 2020 for an eight-year period. Equal payments under the lease are P500,000 and are due on January 1 of each year. The first payment was made on January 1, 2020. The carrying amount of the equipment is P2,000,000. The lease is appropriately accounted for as a sales type lease. The present value of the lease payments at an implicit interest rate of 12% is P2,780,000. What amount of gross income on sale should be reported for 2020? 2,780, 000 - 2000,000 a. 500,000 b. 780,000 C. 240,000 tehran. 780,000 d. 333,600 Problem 39-6 (AICPA Adapted) Meg Company leased equipment to Wee Company on January 1, 2020 for an eight-year period. upany lease or ten years Equal payments under the lease are P600,000 and are due on December 31 of each year. The first payment was made ach lease y on December 31, 2020. The rate of interest contemplated by Meg and Wee is 10%. as a finder The cash selling price of the equipment is P3,520,000 and the carrying amount is P2,800,000. The lease is appropriately . Wren incur recorded as a sales type lease. P90, 000 fit 1. What amount of gross income on the sale should be recorded for the year ended December 31, 2020? a. 600,000 b. 720,000 720,000 reported by C. 360,000 d. 300,000 2. What amount of interest revenue should be recorded for 2020? a. b. 280,000 352,000 C. 292,000 0 789