A manufacturer of shipping equipment decided to lease an equipment with a fair value of P2,500,000 on January 1, 2020 to a company needing the equipment but lacks sufficient funds to pay the entire...

Extracted text: A manufacturer of shipping equipment decided to lease an equipment with a fair value of P2,500,000 on January 1, 2020 to a company needing the equipment but lacks sufficient funds to pay the entire list price. The transaction was recorded as a sale in the manufacturer's books and as a purchase by the buyer. The equipment had a carrying amount of P1,800,000 in the manufacturer's inventory at the time, and an estimated useful life of 6 years. The following information is presented regarding the lease: Year-end annual lease payments P700,000 Implicit rate 10% Lease term 5 years USE PV FACTORS ROUNDED TO 4 DECIMALS. ROUND FINAL ANSWERS TO NEAREST PESO. Determine total income recognized by the manufacturer in 2020 related to the sale and lease.


Extracted text: On January 1, 2020, A Company sold a building to B Company with a carrying amount of P4,200,000 for P5,500,000 and immediately leased it back. The building had a fair value of P4,700,000 at the date of sale, and had a remaining useful life of 10 years. Additional information on the lease is as follows: Lease term 5 years P500,000 Annuity made in advance 10% Implicit rate USE PV FACTORS ROUNDED TO 4 DECIMALS. ROUND FINAL ANSWERS TO NEAREST PESO. Determine total rent income recognized by B Company in 2020.