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How much interest revenue is recognized

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Reference no: EM132531624

Question - A lease agreement included the following provisions:

Inception of the lease: 1/1/2014

Annual lease payments of $6,000 are due 12/31/2014, 12/31/2015, 12/31/2016

Annual lease payments of $4,000 are due 12/31/2017, 12/31/2018, 12/31/2019

The lease calls for a total of six lease payments.

The lessor's implicit rate of return is 12%.

The lease is a capital lease to the lessor.

Required - How much interest revenue is recognized in 2014 by the lessor, assuming a calendar-year fiscal year?

a. $2,550

b. $3,600

c. $3,419

d. $2,118

Reference no: EM132531624

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