On January 1, 2020, MECQ Company leased to Wuhan Company a Lab Equipment in a Sales Type Lease with the following details:

Annual Rental payable at the end of each year1,200,000

Lease Term and Useful Life5 years

Cost of Machinery2,500,000

Guaranteed Residual Value250,000

Implicit Interest Rate12%

Payment starts on January 1, 2020

1.How much is the Value of Net Investment (Sales) of the Sales Type Lease?

2.How much is the Gross Profit of the Sales Type Lease?

3.How much is the Carrying Amount of the Lease as of December 31, 2021?

4.How much is the Interest Income for 2020?