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On August 1, 2019, PhaAviation leased two helicopters from WayoAircraft for an initial period of 12 months with a provision for a continuation of a month-to-month basis. The lease is property classified under a low value asset. Lease payments are to be made as follows: 1st two months-P15,000 per month Next three months-P12,000 per month Next three months-P10,000 per month Last four months-P 7,500 per month After the first year, the rent continues at P6,000 per month. How much is PhaAviation’s rent expense for the year ended December 31, 2019? A.P10,500 B.P52,500 C.P66,000 D.P126,000 How much is PhaAviation’s prepaid rent balance at December 31, 2019? A. P13,500 B.P23,500 C.P55,500 D.P66,000

On August 1, 2019, PhaAviation leased two helicopters from WayoAircraft for an initial period of 12 months with a provision for a continuation of a month-to-month basis. The lease is property classified under a low value asset. Lease payments are to be made as follows: 1st two months-P15,000 per month Next three months-P12,000 per month Next three months-P10,000 per month Last four months-P 7,500 per month After the first year, the rent continues at P6,000 per month. How much is PhaAviation’s rent expense for the year ended December 31, 2019? A.P10,500 B.P52,500 C.P66,000 D.P126,000 How much is PhaAviation’s prepaid rent balance at December 31, 2019? A. P13,500 B.P23,500 C.P55,500 D.P66,000

FINANCIAL ACCOUNTING
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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On August 1, 2019, PhaAviation leased two helicopters from WayoAircraft for an initial period of 12 months with a provision for a continuation of a month-to-month basis. The lease is property classified under a low value asset. Lease payments are to be made as follows:

1st two months-P15,000 per month

Next three months-P12,000 per month

Next three months-P10,000 per month

Last four months-P 7,500 per month

After the first year, the rent continues at P6,000 per month.

How much is PhaAviation’s rent expense for the year ended December 31, 2019?

A.P10,500 B.P52,500 C.P66,000 D.P126,000

How much is PhaAviation’s prepaid rent balance at December 31, 2019?

A. P13,500

B.P23,500

C.P55,500

D.P66,000

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