22. Lessor granted lessee sixmonths of free rent under athree-year operating lease,effective January 01, 2020. Inthe lessee's statement ofcomprehensive income for2020, the amount of the rentexpense is equal to *a. One-sixth of the total cash paidover the three-year period.b. Five-sixth of the total cash paidover the three-year period.c. One-third of the total cash paidover the three-year period.d. Zero because in lessee'sO perspective, leases should beaccounted for as finance lease.

Solution: As lease is classified as operating lease, therefore lessee would recognized equal rental…

22. Lessor granted lessee six months of free rent under a three-year operating lease, effective January 01, 2020. In the lessee's statement of comprehensive income for 2020, the amount of the rent expense is equal to

22. Lessor granted lessee six months of free rent under a three-year operating lease, effective January 01, 2020. In the lessee's statement of comprehensive income for 2020, the amount of the rent expense is equal to

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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