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A Lease Agreement Included the Following Provisions

Question 53

Multiple Choice

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


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

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