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
