A Lease Agreement Includes the Following Provisions: Inception: 1/1/x0 Annual

A lease agreement includes the following provisions: Inception: 1/1/x0 Annual lease payments of $6,000 are due 12/31/x0, x1, x2
Annual lease payments of $4,000 are due 12/31/x3, x4, x5 There are 6 lease payments in all
Lessor's implicit rate of return: 12% This is a finance lease to the lessor
How much interest revenue is recognized in 20x0 by the lessor (assume a calendar year fiscal year) ?

A) $2,118
B) $3,419
C) $2,550
D) $3,600

Correct Answer:

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