Problem 8-2 BEN Company entered into a finance lease on January 1, 2016. A third party guaranteed the residual value of the asset under the lease term estimated to be =P1,200,000 on January 1, 2021,...

Hi kindly answer the questions in the attached file. Thank you :)

Extracted text: Problem 8-2 BEN Company entered into a finance lease on January 1, 2016. A third party guaranteed the residual value of the asset under the lease term estimated to be =P1,200,000 on January 1, 2021, the end of the lease term. Annual lease payments are =P1,000,000 due each December 31, beginning December 31, 2016. The last payment is due December 31, 2020. The remaining useful life of the asset was six years at the commencement of the lease. Both the lessor and lessee used 10% as the interest rate. Required: 1. Compute for the following: a. Net investment at the commencement date b. Gross investment at the commencement date c. Unearned interest at the commencement date d. Interest income in 2016 2. Record the journal entry to be recorded for the year 2016. |