July 1, 2018, Gee Company leased a delivery truck from Marr Compar 3-year operating lease. Total rent for the term of the lease will be P360,000 payable as follows: 12 months at P5,000= P60,000 12 months at P7,500= 90,000 12 months at P17,500= 210,000

July 1, 2018, Gee Company leased a delivery truck from Marr Compar 3-year operating lease. Total rent for the term of the lease will be P360,000 payable as follows: 12 months at P5,000= P60,000 12 months at P7,500= 90,000 12 months at P17,500= 210,000

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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Concept explainers

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.

Question

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On July 1, 2018, Gee Company leased a delivery truck from Marr Company under a
3-year operating lease.
Total rent for the term of the lease will be P360,000 payable as follows:
12 months at P5,000= P60,000
12 months at P7,500= 90,000
12 months at P17,500= 210,000
All payments were made when due.
a. What is the rent revenue for the year ended June 30, 2019?
b. On June 30,2020, what amount should be reported as accrued rent receivable?

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