Calculation of unknown rent and interest.
Pine Leasing Company purchased specialized equipment from Wayne Company on December 31, 2013 for $800,000. On the same date, it leased this equipment to Sears Company for 5 years, the useful life of the equipment. The lease payments begin January 1, 2014 and are made every 6 months until July 1, 2018. Pine Leasing wants to earn 10% annually on its investment.
Instructions
(a) Calculate the amount of each rent.
(b) How much interest revenue will Pine earn in 2014?

Question

Calculation of unknown rent and interest.
Pine Leasing Company purchased specialized equipment from Wayne Company on December 31, 2013 for $800,000. On the same date, it leased this equipment to Sears Company for 5 years, the useful life of the equipment. The lease payments begin January 1, 2014 and are made every 6 months until July 1, 2018. Pine Leasing wants to earn 10% annually on its investment.  
Instructions
(a) Calculate the amount of each rent.
(b) How much interest revenue will Pine earn in 2014?

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The Answer of Calculation of unknown rent and interest.
Pine Leasing Company purchased specialized equipment from Wayne Company on December 31, 2013 for $800,000. On the same date, it leased this equipment to Sears Company for 5 years, the useful life of the equipment. The lease payments begin January 1, 2014 and are made every 6 months until July 1, 2018. Pine Leasing wants to earn 10% annually on its investment.  
Instructions
(a) Calculate the amount of each rent.
(b) How much interest revenue will Pine earn in 2014?

Calculation of Unknown Rent and Interest