A Co entered into an agreement to lease office space on 1 April 2019 for a fixed period of five years. As an incentive to encourage the office space to be occupied, a first-year rent-free period was included in the agreement after which A Co is required to pay an annual lease of P360,000. How much lease should be accounted for in the year ended 31 March 2020? A. P0 B. P288,000 C. P360,000 D. P1,440,000

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.