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How much is the annual rental payment

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Question - Oklahoma Company is engaged in leasing equipment. Such equipment was delivered to a lessee at the beginning of a current year under a direct financing lease with the following provisions:

Cost of equipment P3,112,000

Guaranteed residual value 500,000

Useful life and lease term in years 5

Implicit interest rate 9%

The annual rental is payable at the end of each year. The property will transfer to the lessee at the end of the lease term. How much is the annual rental payment (round-off to the nearest peso value)?

Reference no: EM133135736

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