Please help me out whether the following pertains to finance or operating lease with reasons:
An equipment is leased for 3 years and its useful life is 5 years. Both the cost and fair value of equipment are Rs. 3 Lakhs. The amount will be paid in 3 installments and at the termination of lease, lessor will get back the equipment. The ungauranteed residual value at the end of 3 years is Rs. 40000. IRR of the investment is 10%. The present value of annuity factor at the end of 3rd year at 10% IRR is 2.4868. The The present value at the end of 3rd year @ 10%is 0.713.
Also calculate unearned finance income?
CAclubindia
