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Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2018....

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Accounting

Technoid Inc. sells computer systems. Technoid leases computersto Lone Star Company on January 1, 2018. The manufacturing cost ofthe computers was $19 million.

This non-cancelable lease had the following terms:

1.) Lease payments: 3,287,947 semiannually, first payment atJanuary 1, 2018; remaining payments at June 30 and December 31 eachyear through June 30, 2022

2.) Lease term: 5 years (10 semi-annual payments)

3.) No residual value; no purchase option

4.) Economic Life of equipment: 5 years

5.) Implicit interest rate and lessee's incremental borrowingrate: 9% semiannually

6.) Fair Value of the computers at January 1, 2018: $23million

What is the interest revenue that Technoid would report for thislease in its 2018 income statement?

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