REVIEW NOTES LEASES (PFRS 16)

PFRS 16 – mandatory application starting January 1, 2019

Lease - a contract or a part of a contract that conveys the right to use the underlying asset for a period of time in
exchange for a consideration
- finance or operating

LESSEE
 Account as FINANCE LEASE
 Option to account as OPERATING LEASE will only exist if the lease is (1) Short-term; or (2) Low value
o Short-term – 12 months or less
o Low value – reference to the value of the underlying asset when new; based on professional judgment
Operating Lease
 Recognize lease payments as expense on a straight line basis or another systematic basis
Finance Lease
 Recognize an ASSET (“Right of Use Asset”) for the right to use the underlying asset and a LIABILITY (“Lease
Liability”) for the future lease payments
 RIGHT OF USE - Initial measurement of Lease Liability
- (+) Lease Bonus; (-) Lease Incentives
- Directly attributable costs (DAC)
- Estimated cost of restoring, dismantling, or removing the underlying asset
 LEASE LIABILITY - Payments (Fixed or Variable)
- Purchase option (if exercising the option is reasonably certain)
- GUARANTEED residual value
- Termination penalties
Additional Notes/Points/Tips:
 Account Right of Use similar to PPE (Depreciate)
 Amortize Lease Liability; accounting is similar to Non-Interest Bearing Note
 Depreciate using LIFE OF ASSET if lessee will exercise option or if there is transfer of ownership; Depreciate using
LEASE TERM if not
 If there is a residual value, there will be no purchase option because the lessee is expected to return the asset
 USE IMPLICIT RATE!
 Tip: Compute for Lease Liability first since it is one of the components of Right of Use

LESSOR
 Similar to PAS 17
Operating Lease
 Recognize lease payments as income on a straight line basis or another systematic basis
Finance Lease
 Lease is classified as finance if:
o Ownership is transferred to lessee at the end of the lease term
o If there is an option payment (exercise is reasonably certain) which is sufficiently lower than the FV of the
asset
o Lease term constitutes major part of the useful life of the asset (US GAAP: major part is 75%)
o Present value of lease payments is substantially equal to the FV of the asset at inception of lease (US
GAAP: substantially equal is at least 90%)
 Classifications
o Direct finance lease – financing business; only interest income is recognized
o Sales type lease – manufacturer or dealer; gross profit and interest income are recognized
Direct Finance Lease
 Entry at the beginning of the lease agreement:
Lease Receivable xxx
Underlying Asset xxx
Unearned Interest Income xxx
o Lease Receivable = Gross Rentals + Purchase Option + Residual Value (whether guaranteed or
unguaranteed); Important Note: NOT IN THEIR PRESENT VALUE
o Underlying Asset = Cost of the Asset + DAC
o Unearned Interest Income – simply the difference between Lease Receivable and the Underlying Asset
 Gross Rentals – regular rental payment times lease term
 DAC – debited/added to underlying asset before being credited
Sales Type Lease
 Entry at the beginning of the lease agreement:
Lease Receivable xxx
Cost of Goods Sold xxx
Inventory xxx
Sales xxx
Unearned Interest Income xxx
o Lease Receivable = Gross Rentals + Purchase Option + Residual Value (whether guaranteed or
unguaranteed); Important Note: NOT IN THEIR PRESENT VALUE
o Inventory – credited at the cost of the inventory
o Cost of Goods Sold = Cost of Inventory – PV of UNGUARANTEED Residual Value
o Sales = PV of Gross Rentals + PV of Purchase Option + PV of GUARANTEED Residual Value
 NOTE: the treatment of residual value is THE SAME in the Lease Receivable (i.e. it is still
included in the computation), but the treatment of its present value is DIFFERENT. It is
important to note that the unearned interest income WILL NOT BE AFFECTED whether the
residual value is guaranteed or unguaranteed; for GUARANTEED, it is an addition to Sales, which

Lord Gen A. Rilloraza, CPA || 1

REVIEW NOTES LEASES (PFRS 16)
is an addition to the credit side, while for UNGUARANTEED, it is a deduction to COGS, which is a
deduction from the debit side.
 DAC – prepare a separate entry debiting COGS and crediting Cash (or other appropriate account)
Additional Notes/Points/Tips
 If there is a residual value, there will be no purchase option since the lessee is required to return the asset
 Treat the Gross Investment and the Unearned Interest Income similar to accounting for Bonds Receivable (i.e.
reduce Lease Receivable for every rental payment received; amortize Unearned Interest Income)
 The CARRYING VALUE of Lease Receivable is the difference between the BALANCE OF LEASE RECEIVABLE and
the UNEARNED INTEREST INCOME. Use the carrying value in amortization.
 Make sure to use the CORRECT IMPLICIT RATE! (Regular Rental Payment = Net Investment/PV of OA)

SAMPLE PROBLEMS:
To make your review more effective, answer the problems first before checking the solutions.

PROBLEM 1 – Operating Lease

On January 1, 2017, Lessee Inc. leased an equipment from Lessor Company. The agreement includes the lease term which
is 3 years, and requires Lessee to pay P40,000; P50,000; and P60,000 on December 31, 2017; 2018; and 2019, respectively.
The equipment, which has a useful life of 20 years, is considered to be of low value.
Requirements:
1. Prepare the journal entries for 2017, 2018, and 2019.
2. How much is the rent income to be recognized by Lessor Company for 2017, 2018, and 2019?
3. How much is the rent expense to be recognized by Lessee Inc. for 2017, 2018, and 2019?

PROBLEM 2 – Direct Finance Lease (No purchase option; no residual value)

Raven Company bought a machinery on January 1, 2017 for P2,139,335. The useful life of the machine is 5 years. On the
same day, Eagle Corporation leased the said machinery for 5 years. Raven required Eagle to pay P550,000 every December
31. The implicit rate for this agreement is 9%, and the current market rate is 12%. (Use four decimal places for PVF)
Requirements:
Lessee
1. At how much shall the Lease Liability be initially measured?
2. At how much shall the Right of Use Asset be initially measured?
3. How much is the rent expense for 2017 and 2018?
4. How much is the depreciation expense for 2017 and 2018?
5. How much is the interest expense for 2017 and 2018?
6. How much is the total expense related to the lease agreement that should be recognized for 2017 and 2018?
7. What is the carrying value of the Right of Use Asset as of December 31, 2017? December 31, 2018?
8. What is the carrying value of the Lease Liability as of December 31, 2017? December 31, 2018?
9. Prepare the journal entries for 2017 and 2018
Lessor
10. At how much shall Lease Receivable be initially measured?
11. At how much shall Unearned Interest Income be initially recognized?
12. How much is the rent income for 2017 and 2018?
13. How much is the interest income for 2017 and 2018?
14. What is the balance of Lease Receivable as of December 31, 2017? December 31, 2018?
15. What is the carrying value of Lease Receivable as of December 31, 2017? December 31, 2018?
16. Prepare the journal entries for 2017 and 2018

PROBLEM 3 – Direct Finance Lease (With initial direct cost paid by lessor)
On January 1, 2017, Lessor Company leased an equipment to Lessee Company. The details are as follows:
Cost of equipment 2,058,440
Annual rental payable every December 31 400,000
Lease term 8 years
Useful life of machinery 10 years
Implicit rate before initial direct cost 11%
Implicit rate after initial direct cost 10%
PV of OA of 1 for 8 years at 11% 5.1461
PV of OA of 1 for 8 years at 10% 5.3349
Lessor paid initial direct costs of P75,520 on January 1, 2017.
Requirements:
Lessee
1. At how much shall the Lease Liability be initially measured?
2. At how much shall the Right of Use Asset be initially measured?
3. How much is the depreciation expense for 2017 and 2018?
4. How much is the interest expense for 2017 and 2018?
5. How much is the total expense related to the lease agreement that should be recognized for 2017 and 2018?
6. What is the carrying value of the Right of Use Asset as of December 31, 2017? December 31, 2018?
7. What is the carrying value of the Lease Liability as of December 31, 2017? December 31, 2018?
8. Prepare the journal entries for 2017 and 2018
Lessor
9. At how much shall Lease Receivable be initially measured?
10. At how much shall Unearned Interest Income be initially recognized?
11. How much is the interest income for 2017 and 2018?
12. What is the balance of Lease Receivable as of December 31, 2017? December 31, 2018?
13. What is the carrying value of Lease Receivable as of December 31, 2017? December 31, 2018?
14. Prepare the journal entries for 2017 and 2018

Lord Gen A. Rilloraza, CPA || 2

REVIEW NOTES LEASES (PFRS 16)

PROBLEM 4 – Direct Finance Lease (With UNGUARANTEED residual value and initial direct cost paid by lessee)
On January 1, 2017, Bessor Company leased its machine costing P1,859,000 to Bessee Company. The estimated useful life
of the machine is 6 years; the lease term is 5 years. Bessee is required to pay P500,000 every December 31. The agreement
includes an unguaranteed residual value of P100,000 at the end of the lease term. The implicit rate of the lease agreement
is 12%. Bessee paid P50,000 as initial direct cost. (Use four decimal places for PVF)
Requirements:
Lessee
1. At how much shall the Lease Liability be initially measured?
2. At how much shall the Right of Use Asset be initially measured?
3. How much is the depreciation expense for 2017 and 2018?
4. How much is the interest expense for 2017 and 2018?
5. How much is the total expense related to the lease agreement that should be recognized for 2017 and 2018?
6. What is the carrying value of the Right of Use Asset as of December 31, 2017? December 31, 2018?
7. What is the carrying value of the Lease Liability as of December 31, 2017? December 31, 2018?
8. Prepare the journal entries for 2017 and 2018
Lessor
9. At how much shall Lease Receivable be initially measured?
10. At how much shall Unearned Interest Income be initially recognized?
11. How much is the interest income for 2017 and 2018?
12. What is the balance of Lease Receivable as of December 31, 2017? December 31, 2018?
13. What is the carrying value of Lease Receivable as of December 31, 2017? December 31, 2018?
14. Prepare the journal entries for 2017 and 2018

PROBLEM 5 – Sales Type Lease

On January 1, 2017, Sensor Company, a manufacturer of heavy machineries, entered into a sales type lease agreement
with Sensei Company, related to a machinery costing P2,500,000. The selling price for this type of machine is P4,000,000.
To achieve an implicit rate of 8%, Sensei is required to pay P1,207,500 every December 31. The lease term is 4 years.
Requirements:
1. How much is the gross profit of the lessor?
2. At how much shall Lease Receivable be initially measured?
3. At how much shall Unearned Interest Income be initially recognized?
4. How much is the interest income for 2017 and 2018?
5. Prepare the journal entries of the lessor for 2017 and 2018, assuming perpetual accounting for inventory is used.

SOLUTIONS:
PROBLEM 1
(1)

Lessor Lessee
December 31, 2017 December 31, 2017
Cash 40,000 Rent Expense 50,000
Rent Receivable 10,000 Cash 40,000
Rent Income 50,000 Rent Payable 10,000

December 31, 2018 December 31, 2018

Cash 50,000 Rent Expense 50,000
Rent Income 50,000 Cash 50,000

December 31, 2019 December 31, 2019

Cash 60,000 Rent Expense 50,000
Rent Receivable 50,000 Rent Payable 10,000
Rent Income 10,000 Cash 60,000

(2) and (3) – P50,000

Rent Expense/Income = P50,000
Note: Rent expense and income are recognized on a straight line basis (P50k annually). That’s ((40k+50k+60k)/3years).
Needless to say, it should be equal for the rest of the lease term.

PROBLEM 2
Lessee
(1)
Lease liability – Payments; Purchase Option; Guaranteed Residual Value; Penalties
Annual payment 550,000
PVF of OA (9% for 5 years) 3.8897
Lease liability 2,139,335

(2)
Right of Use Asset – Lease Liability; Lease Bonus/Incentive; DAC; Cost of restoration
Right of Use Asset 2,139,335

(3) No Rent Expense under finance lease

Lord Gen A. Rilloraza, CPA || 3
REVIEW NOTES LEASES (PFRS 16)

(4) 2017 and 2018 – P427,867

Right of Use Asset 2,139,335
D: Lease term 5
Annual Depreciation 427,867
(5) 2017 – P192,540; 2018 – P160,369

Amortization Table of Lease Liability

Date Int. Exp. Rent Paid CV
1/1/17 2,139,335
12/31/17 192,540 550,000 1,781,875
12/31/18 160,369 550,000 1,392,244
12/31/19 125,302 550,000 967,546
12/31/20 87,079 550,000 504,625
12/31/21 45,375 550,000 -

(6) 2017 – P620,407; 2018 – P588,236

Depreciation expense, 2017 427,867
Interest expense, 2017 192,540
Total expense, 2017 620,407

Depreciation expense, 2018 427,867

Interest expense, 2018 160,369
Total expense, 2018 588,236

(7) Dec. 31, 2017 – P1,711,468; Dec. 31, 2018 – P1,283,601

Right of use 2,139,335
Accum Depn, 12/31/17 (427,867)
CV, 12/31/17 1,711,468

Right of use 2,139,335

Accum Depn, 12/31/18 (855,734)
CV, 12/31/18 1,283,601

(8) Dec. 31, 2017 – P1,781,875; Dec. 31, 2018 – P1,392,244

Refer to amortization table for lease liability

(9)
January 1, 2017
Right of Use 2,139,335
Lease Liability 2,139,335

December 31, 2017

Depreciation Expense 427,867
Accumulated Depreciation - Right of Use 427,867

Interest Expense 192,540

Lease Liability 357,460
Cash 550,000

December 31, 2018

Depreciation Expense 427,867
Accumulated Depreciation - Right of Use 427,867

Interest Expense 160,369

Lease Liability 389,631
Cash 550,000
Lessor
(10) P2,750,000
Lease Receivable (P550k * 5) 2,750,000

(11) P610,665
Gross investment (lease receivable) 2,750,000
Net investment (the underlying asset) (2,139,335)
Unearned interest income 610,665

Lord Gen A. Rilloraza, CPA || 4

REVIEW NOTES LEASES (PFRS 16)

(12) 2017 and 2018 – none

No rent income for finance lease

(13) 2017 – P192,540; 2018 – P160,369

Amortization table. This is ONLY COINCIDENTALLY the same as the amortization table of the lessee. The tables are not
always the same.
Rent
Date Int. Inc. CV
Received
1/1/17 2,139,335
12/31/17 192,540 550,000 1,781,875
12/31/18 160,369 550,000 1,392,244
12/31/19 125,302 550,000 967,546
12/31/20 87,079 550,000 504,625
12/31/21 45,375 550,000 -

(14) 2017 – P2,200,000; 2018 – P1,650,000

Lease receivable, 1/1/17 2,750,000
Collection in 2017 (550,000)
Lease receivable, 12/31/17 2,200,000

Lease receivable, 12/31/17 2,200,000

Collection in 2017 (550,000)
Lease receivable, 12/31/18 1,650,000

(15) 2017 – P1,781,875; 2018 – P1,392,244

Refer to amortization table for lessor.

(16)
January 1, 2017
Machinery 2,139,335
Cash 2,139,335

Lease Receivable 2,750,000

Machinery 2,139,335
Unearned Interest Income 610,665

December 31, 2017

Cash 550,000
Unearned Interest Income 192,540
Lease Receivable 550,000
Interest Income 192,540

December 31, 2018

Cash 550,000
Unearned Interest Income 160,369
Lease Receivable 550,000
Interest Income 160,369

PROBLEM 3
Lessee
(1) P2,133,960
Lease liability – Payments; Purchase Option; Guaranteed Residual Value; Penalties
Annual payment 400,000
PVF 5.3349
Lease liability 2,133,960

(2) P2,133,960
Right of Use Asset – Lease Liability; Lease Bonus/Incentive; DAC; Cost of restoration
Right of Use Asset 2,133,960
Note: The initial direct cost was paid by the lessor, not the lessee; thus, it is not included in the computation.

(3) 2017 and 2018 – P266,745

Right of Use Asset 2,133,960
D: Lease term 8
Annual Depreciation 266,745

(4) 2017 – P213,396; 2018 – P194,736

Lord Gen A. Rilloraza, CPA || 5
REVIEW NOTES LEASES (PFRS 16)
Amortization Table of Lease Liability
Date Int. Exp. Rent Paid CV
1/1/17 2,133,960
12/31/17 213,396 400,000 1,947,356
12/31/18 194,736 400,000 1,742,092
12/31/19 174,209 400,000 1,516,301
12/31/20 151,630 400,000 1,267,931
12/31/21 126,793 400,000 994,724
12/31/22 99,472 400,000 694,196
12/31/23 69,420 400,000 363,616
12/31/24 36,384 400,000 -

(5) 2017 – P480,141; 2018 – P461,481

Depn exp - 2017 266,745
Interest exp - 2017 213,396
Total expense, 2017 480,141

Depn exp - 2018 266,745

Interest exp - 2018 194,736
Total expense, 2018 461,481

(6) Dec. 31, 2017 – P1,867,215; Dec. 31, 2018 – P1,600,470

Right of use 2,133,960
Accum Depn, 12/31/17 (266,745)
CV, 12/31/17 1,867,215

Right of use 2,133,960

Accum Depn, 12/31/18 (533,490)
CV, 12/31/18 1,600,470

(7) Dec. 31, 2017 – P1,947,356; Dec. 31, 2018 – P1,742,092

Refer to amortization table

(8)
January 1, 2017
Right of Use 2,133,960
Lease Liability 2,133,960

December 31, 2017

Depreciation Expense 266,745
Accumulated Depreciation - Right of Use 266,745

Interest Expense 213,396

Lease Liability 186,604
Cash 400,000

December 31, 2018

Depreciation Expense 266,745
Accumulated Depreciation - Right of Use 266,745

Interest Expense 194,736

Lease Liability 205,264
Cash 400,000

Lessor
(9) P3,200,000
Lease Receivable (P400k * 8) 3,200,000

(10) P1,066,040
Gross investment (lease receivable) 3,200,000
Less: net investment
Equipment 2,058,440
Initial direct cost 75,520 2,133,960
Unearned interest income 1,066,040

(11) 2017 – P213,396; 2018 – P194,736

Lord Gen A. Rilloraza, CPA || 6
REVIEW NOTES LEASES (PFRS 16)
Amortization table. This is ONLY COINCIDENTALLY the same as the amortization table of the lessee. The tables are not
always the same.
Rent
Date Int. Inc. CV
Received
1/1/17 2,133,960
12/31/17 213,396 400,000 1,947,356
12/31/18 194,736 400,000 1,742,092
12/31/19 174,209 400,000 1,516,301
12/31/20 151,630 400,000 1,267,931
12/31/21 126,793 400,000 994,724
12/31/22 99,472 400,000 694,196
12/31/23 69,420 400,000 363,616
12/31/24 36,384 400,000 -

(12) Dec. 31, 2017 – P2,800,000; Dec. 31, 2018 – P2,400,000

Lease receivable, 1/1/17 3,200,000
Collection for 2017 (400,000)
Lease receivable, 12/31/17 2,800,000
Collection for 2018 (400,000)
Lease receivable, 12/31/18 2,400,000

(13) Dec. 31, 2017 – P1,947,356; Dec. 31, 2018 – P1,742,092

Refer to amortization table

(14)
January 1, 2017
Equipment 2,058,440
Cash 2,058,440
*for the purchase

Equipment 75,520
Cash 75,520
*for the payment of initial direct cost

Lease Receivable 3,200,000

Equipment 2,133,960
Unearned Interest Income 1,066,040

December 31, 2017

Cash 400,000
Unearned Interest Income 213,396
Lease Receivable 400,000
Interest Income 213,396

December 31, 2018

Cash 400,000
Unearned Interest Income 194,736
Lease Receivable 400,000
Interest Income 194,736

PROBLEM 4
Lessee
(1) P1,802,400
Lease liability – Payments; Purchase Option; Guaranteed Residual Value; Penalties
Annual payment 500,000
PVF 3.6048
Lease liability 1,802,400
The residual value is not included since it is unguaranteed.

(2) P1,852,400
Right of Use Asset – Lease Liability; Lease Bonus/Incentive; DAC; Cost of restoration
Lease liability 1,802,400
Initial direct cost 50,000
Right of Use Asset 1,852,400

(3) 2017 and 2018 – P370,480

Right of Use Asset 1,852,400

Lord Gen A. Rilloraza, CPA || 7

REVIEW NOTES LEASES (PFRS 16)
D: Lease term 5
Annual Depreciation 370,480

(4) 2017 – P216,288; 2018 – P182,243

Amortization table for the lease liability.
Date Int. Exp. Rent Paid CV
1/1/17 1,802,400
12/31/17 216,288 500,000 1,518,688
12/31/18 182,243 500,000 1,200,931
12/31/19 144,112 500,000 845,042
12/31/20 101,405 500,000 446,447
12/31/21 53,553 500,000 0

(5) 2017 – P586,768; 2018 – P552,723

Depn exp - 2017 370,480
Interest exp - 2017 216,288
Total expense, 2017 586,768

Depn exp - 2018 370,480

Interest exp - 2018 182,243
Total expense, 2018 552,723

(6) Dec. 31, 2017 – P1,481,920; Dec. 31, 2018 – P1,111,440

Right of use 1,852,400
Accum Depn, 12/31/17 (370,480)
CV, 12/31/17 1,481,920

Right of use 1,852,400

Accum Depn, 12/31/18 (740,960)
CV, 12/31/18 1,111,440

(7) Dec. 31, 2017 – 1,518,688; Dec. 31, 2018 – P1,200,931

Refer to the amortization table

(8)
January 1, 2017
Right of Use 1,852,400
Lease Liability 1,802,400
Cash 50,000
*the credit to cash is for the DAC

December 31, 2017

Depreciation Expense 370,480
Accumulated Depreciation - Right of Use 370,480

Interest Expense 216,288

Lease Liability 283,712
Cash 500,000

December 31, 2018

Depreciation Expense 370,480
Accumulated Depreciation - Right of Use 370,480

Interest Expense 182,243

Lease Liability 317,757
Cash 500,000

Lessor
(9) P2,600,000
Gross rental (P500k * 5) 2,500,000
Unguaranteed residual value 100,000
Lease receivable 2,600,000

(10) P741,000
Lease receivable 2,600,000

Lord Gen A. Rilloraza, CPA || 8

REVIEW NOTES LEASES (PFRS 16)
Cost of the asset (1,859,000)
Unearned interest income 741,000

(11) 2017 – P223,080; P189,850

Amortization table for lease receivable. Take note that it is DIFFERENT from the amortization table of the lessee.
Rent
Date Int. Inc. CV
Received
1/1/17 1,859,000
12/31/17 223,080 500,000 1,582,080
12/31/18 189,850 500,000 1,271,930
12/31/19 152,632 500,000 924,561
12/31/20 110,947 500,000 535,508
12/31/21 64,492 500,000 100,000
*the P100,000 ending balance on December 31, 2021 is the RESIDUAL VALUE. Upon receipt of the asset, debit the asset at
P100,000, then credit Lease Receivable for the same amount, effectively removing the balance.

(12) Dec. 31, 2017 – P2,100,000; Dec. 31, 2018 – P1,600,000

Lease receivable, 1/1/17 2,600,000
Collection for 2017 (500,000)
Lease receivable, 12/31/17 2,100,000
Collection for 2018 (500,000)
Lease receivable, 12/31/18 1,600,000

(13) Dec. 31, 2017 – P1,582,080; Dec. 31, 2018 – P1,271,930

Refer to the amortization table

(14)
January 1, 2017
Lease Receivable 2,600,000
Equipment 1,859,000
Unearned Interest Income 741,000

December 31, 2017

Cash 500,000
Unearned Interest Income 223,080
Lease Receivable 500,000
Interest Income 223,080

December 31, 2018

Cash 500,000
Unearned Interest Income 189,850
Lease Receivable 500,000
Interest Income 189,850

PROBLEM 5
(1) P1,500,000
Selling price 4,000,000
Cost of goods sold (2,500,000)
Gross profit 1,500,000

(2) P4,830,000
Lease receivable (P1,207,500 * 4) 4,830,000

(3) P830,000
Lease receivable 4,830,000
Sales (4,000,000)
Unearned interest income 830,000

(4) 2017 – P320,000; 2018 – P249,000

Rent
Date Int. Inc. CV
Received
1/1/17 4,000,000
12/31/17 320,000 1,207,500 3,112,500
12/31/18 249,000 1,207,500 2,154,000
12/31/19 172,320 1,207,500 1,118,820
12/31/20 88,680 1,207,500 0

Lord Gen A. Rilloraza, CPA || 9

REVIEW NOTES LEASES (PFRS 16)

(5)
January 1, 2017
Lease Receivable 4,830,000
Cost of Goods Sold 2,500,000
Inventory 2,500,000
Sales 4,000,000
Unearned Interest Income 830,000

December 31, 2017

Cash 1,207,500
Unearned Interest Income 320,000
Lease Receivable 1,207,500
Interest Income 320,000

December 31, 2018

Cash 1,207,500
Unearned Interest Income 249,000
Lease Receivable 1,207,500
Interest Income 249,000

Lord Gen A. Rilloraza, CPA || 10