Problem 6

On January 1, 2020 a lessor leased out an office space for P400,000 payable in advance every January 1. The implicit interest rate is 8%.

The cost and fair value of the asset is P1,733,201. The useful life and lease term is 6 years and 5 years, respectively. The lessee has an option to purchase the asset for P200,000 at the end of the lease term, the lessee is reasonably certain that it will exercise this option at commencement date.

How much is the current portion of the finance lease receivable as of December 31, 2020?

The interest income to be recognized in 2021 is?