a. Prepare the necessary journal entry to record the transactions.

b. Prepare the entry to revert the helicopter to lessor. Assume that the fair value the asset on that year is

only P400,OOO.

PROBLEM 6

Using the same information in PROBLEM 5, except that the residual value is guaranteed.

Required:

a. Compute the total unearned financial revenue.

b. Compute the manufacturer profit to be recognized immediately.

c. Compute the interest income for the first year.

d. Prepare the necessary journal entry to record the transactions.

e. Prepare the entry to revert the helicopter to lessor. Assume that the fair value the asset on that year is only

P400,OOO.

PROBLEM 7

Using the same information in CIP#16, except that the asset will not revert to the lessor.

Required:
a. Compute the total unearned financial revenue.

b. Compute the manufacturer profit to be recognized immediately.

c. Compute the interest income for the first year.

Prepare the necessary journal entry to record the transactions.