On 1 January 20X1, Solvane, a lessor, entered into a three-year finance lease of a welding robot. The lessee makes three annual payments of 38,000, each on 31 December (in arrears). Solvane estimates the unguaranteed residual value of the robot at the end of the lease at 7,320. At the interest rate implicit in the lease of 10 %, the net investment at the commencement date is 100,000. Compute the total finance income to be recognised over the lease term and the finance income for 20X2.
- Net investment at 1 January 20X1
- 100,000
- Interest rate implicit in the lease
- 10 %
- Annual payment (in arrears)
- 38,000
- Estimated unguaranteed residual value
- 7,320