Kisses company acquired an asset costing p3165000 the

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6. Kisses Company acquired an asset costing P3,165,000. The asset is leased on January 1, 2015 to another entity. Five annual lease payments are due each December 31, beginning December 31, 2015. The unguaranteed residual value of the asset at the end of the lease term on December 31, 2019 is P500,000. The asset will revert to the lessor at the end of the lease term. The lessor’s implicit interest rate is 12%. The PV of 1 at 12% for 5 periods is .57 and the PV of an ordinary annuity of 1 at 12% for 5 periods is 3.60. What is the annual rental payment? For items 7 to 10: Vivoree Company is in the business of leasing new sophisticated equipment. The lessor expects a 12% return on its net investment. All leases are classified as direct financing lease. At the end of the lease term, the equipment will revert to the lessor. On January 1, 2015, an equipment is leased to a lessee with the following information: Cost of equipment to the lessor 5,000,000 Residual value-unguaranteed 600,000 Annual rental payable in advance 900,000 Initial direct cost incurred by the lessor 250,000 Useful life and lease term 8 years Implicit interest rate 12% First lease payment January 1, 2015
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