Answer:
c) $211,875 and $62,475
Explanation:
Options are <em>"a)$0 and $0, b)$0 and $62,475, c) $211,875 and $62,475, d) $211,875 and $74,475"</em>
<em />
Cash Selling Price $1,861,875
Less: Cost of the equipment <u>$1,650,000</u>
Profit on sale <u>$211,875</u>
Opening Lease Receivable Balance $1,861,875
Less: First installment received <u>$300,000</u>
Lease Receivable Balance for <u>$1,561,875</u>
interest computation
Interest expense up to Dec 31, 2010 = (1561875*8%*6/12) = $62,475