Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Technold Inc. sells computer systems. Technold leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $21 million.

image text in transcribed

Technold Inc. sells computer systems. Technold leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $21 million. This noncancelable lease had the following terms: Lease payments: $3,449,757 semiannually, first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. Lease term: 5 years (10 semiannual payments). No residual value; no purchase option. Economic life of equipment: 5 years. Implicit Interest rate and lessee's Incremental borrowing rate: 8% semiannually. Fair value of the computers at January 1, 2021: $25 million. What is the interest revenue that Technold would report for this lease In Its 2021 Income statement? (Round your answer to the nearest whole dollar.) Multiple Choice SO. $3,309.979. None of these answer choices is correct. $1,724,019

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Study Guide Working Papers For College Accounting, Chapters 1-9

Authors: James A. Heintz, Robert W. Parry

23rd Edition

0357474740, 9780357474747

More Books

Students also viewed these Accounting questions

Question

Describe the three major subdivisions of the Malleus Maleficarum.

Answered: 1 week ago

Question

Know the components of a position description

Answered: 1 week ago

Question

Explain the value of a true open-door policy

Answered: 1 week ago