Shinny Jewel C.

Vingno 8/16/2021
BSA-3

Problem 1
Total rental cost {150,000*[(12*5)-10]} 7,500,000
Annual Payment (7,500,000/5) 1,500,000
Rent from March 1 to December 31, 2020
(1,500,000*10/12) 1,250,000

2020 Rent receivable 1,250,000

Rent Income 1,250,000

2021 Cash (150,000*12) 1,800,000

Rent Income 1,500,000
Rent receivable 300,000

2022 Cash 1,800,000

Rent Income 1,500,000
Rent receivable 300,000

2023 Cash 1,800,000

Rent Income 1,500,000
Rent receivable 300,000

2024 Cash 1,800,000

Rent Income 1,500,000
Rent receivable 300,000

2025 Cash (150,000*2) 300,000

Rent Income (1,500,000*2/12) 250,000
Rent Receivable 50,000

Problem 2
2020
Dec-1 Machinery (Equipment) 750,000
Cash 750,000

During December Machinery (Equipment overhaul) 150,000

Cash 150,000

2021
Apr-1 Cash 360,000
Rent Income 360,000

During 2021 Repair Expense 14,000

Transportation Expense 6,000
Cash 20,000

Dec-31 Rental Income 90,000

Unearned Rent Income (360,000*3/12) 90,000

Dec-31 Depreciation Expense [(750,000+150,000)/5] 180,000

Accumulated Depreciation-Machinery 180,000
Shinny Jewel C. Vingno 8/16/2021
BSA-3

Problem 3
a. Gross Investment (400,000*4) 1,600,000
Net Investment in the lease (1,377,480)
Total financial Revenue 222,520

Lease Interest
Date Principal Present Value
Receivable income
b.
1/1/2020 1,377,480
1/1/2020 400,000 - 400,000 977,480
1/1/2021 400,000 107,523 292,477 685,003
1/1/2022 400,000 75,350 324,650 360,353
1/1/2023 400,000 39,647 360,353 -

c.
2020
Jan-1 Lease Receivable 1,600,000
Equipment 1,377,480
Unearned Interest Income 222,520

Cash 440,000
Lease Receivable 400,000
Lease Income 40,000

Dec-31 Unearned Interest Income 107,523

Interest Income 107,523

2021
Jan-1 Cash 440,000
Lease Receivable 400,000
Lease Income 40,000

Dec-31 Unearned Interest Income 75,350

Interest Income 75,350

2022
Jan-1 Cash 440,000
Lease Receivable 400,000
Lease Income 40,000

Dec-31 Unearned Interest Income 39,647

Interest Income 39,647

2023
Jan-1 Cash 440,000
Lease Receivable 400,000
Lease Income 40,000
Shinny Jewel C. Vingno 8/16/2021
BSA-3

Problem 4
1. Gross Rentals (900,000*8) 7,200,000
Residual Value-unguaranteed 600,000
Gross Investment 7,800,000
Net investment-cost of equipment (5,250,000)
Total finance Revenue 2,550,000

2.
2020
Jan-1 Lease Receivable 7,800,000
Equipment 5,250,000
Unearned Interest Income 2,550,000

Cash 900,000
Lease Receivable 900,000

Dec-31 Unearned Interest Income 522,000

Interest Income [(5,250,000-900,000)*12%] 522,000

2027
Jan-1 Cash 900,000
Lease Receivable 900,000

Dec-31 Unearned Interest Income 63,646

Interest Income 63,646

Lease Interest
Date Principal Present Value
Receivable income
1/1/2020 5,250,000
1/1/2020 900,000 - 900,000 4,350,000
1/1/2021 900,000 522,000 378,000 3,972,000
1/1/2022 900,000 476,640 423,360 3,548,640
1/1/2023 900,000 425,837 474,163 3,074,477
1/1/2024 900,000 368,937 531,063 2,543,414
1/1/2025 900,000 305,210 594,790 1,948,624
1/1/2026 900,000 233,835 666,165 1,282,459
1/1/2027 900,000 153,895 746,105 536,354
1/1/2028 600,000 63,646 536,354 -

2028
Jan-1 Equipment 500,000
Loss on finance lease 100,000
Lease Receivable 600,000

Problem 5
1. Gross rentals (1,000,000*5) 5,000,000
Present Value of payment (1,000,000*3.60) (3,600,000)
Unearned Interest Income 1,400,000
Shinny Jewel C. Vingno 8/16/2021
BSA-3

2. Sales 3,600,000
Cost of goods sold (2,000,000)
Gross Profit 1,600,000

Lease Interest
Date Principal Present Value
Receivable income
1/1/2020 3,600,000
12/31/2020 1,000,000 432,000 568,000 3,032,000
12/31/2021 1,000,000 363,840 636,160 2,395,840
12/31/2022 1,000,000 287,501 712,499 1,683,341

3.
2020
Jan-1 Lease Receivable 5,000,000
Sales 3,600,000
Unearned Interest Income 1,400,000

Dec-31 Cash 1,000,000

Lease Receivable 1,000,000

Unearned Interest Income 432,000

Interest Income 432,000

2021
Dec-31 Cash 1,000,000
Lease Receivable 1,000,000

Unearned Interest Income 363,840

Interest Income 363,840

2022
Jul-1 Unearned Interest Income 143,750
Interest Income (287,501*1/2) 143,750

Cash 1,200,000
Unearned Interest Income 460,410
Loss on sale of leased asset 1,339,590
Lease Receivable 3,000,000