Problem 2 (Sales Type Lease - Transfer of ownership)

Lessor Company used leases as a method of selling products. In 2019, the entity completed construction of a
passenger ferry. The ferry was leased to the Super Ferry Line on a contract specifying that ownership of the
ferry
will transfer to the lessee at the end of the lease period.

Annual lease payments do not include executory costs.

1. What amount should be reported as unearned interest income on January 1, 2019?

2. What amount should be reported as gross income on sale for 2019

3. What amount should be reported as interest income for 2019?