Question
Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million.
Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million. This noncancelable lease had the following terms:
Lease payments: $2,466,754 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025.
Lease term: five years (10 semiannual payments).
No residual value; no purchase option.
Economic life of equipment: five years.
Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually.
Fair value of the computers at January 1, 2021: $20 million.
What is the interest revenue that Technoid would report for this lease in its 2021 income statement?
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The Audit Or Iceland A Modern Myth Oberon Modern Plays
Authors: Andrew Westerside And Proto Type Theater
1st Edition
1786824671, 978-1786824677
