g lease, rent for the first year is P80,000 and rent for years 2 through 5 is P125,000 per annum. However, as an inducement to enter the lease, SNOWMAN granted JACK FROS the first six months of the lease rent-free. JACK FROST also paid a lease bonus of P60,000. 1. In its December 31, 2021 income statement, what amount should SNOWMAN report as rental income? a. ₱ 128,000 b. ₱ 120,000 c. ₱ 116,000
g lease, rent for the first year is P80,000 and rent for years 2 through 5 is P125,000 per annum. However, as an inducement to enter the lease, SNOWMAN granted JACK FROS the first six months of the lease rent-free. JACK FROST also paid a lease bonus of P60,000. 1. In its December 31, 2021 income statement, what amount should SNOWMAN report as rental income? a. ₱ 128,000 b. ₱ 120,000 c. ₱ 116,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
SNOWMAN Company leased office premises to JACK FROST Inc. for a 5-year term beginning January 2, 2021. Under the terms of the operating lease, rent for the first year is P80,000 and rent for years 2 through 5 is P125,000 per annum. However, as an inducement to enter the lease, SNOWMAN granted JACK FROS the first six months of the lease rent-free. JACK FROST also paid a lease bonus of P60,000.
1. In its December 31, 2021 income statement, what amount should SNOWMAN report as rental income?
a. ₱ 128,000
b. ₱ 120,000
c. ₱ 116,000
d. ₱ 52,000
2. How much rent receivable should be recognized by SNOWMAN in 2021?
a. ₱ 64,000
b. ₱ 76,000
c. ₱ -0 -
d. ₱ 68,000
e. ₱ 80,000
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