On January 1, 2020, Nge Company leased a building to Lol Corp. for a ten-year term at an annual rental of P140,000. At inception of the lease, Nge received P560,000 covering the first two years' rent of P280,000 and a security deposit of P280,000. This deposit will not be returned to Lol upon expiration of the lease but will be applied to payment of rent for the last two years of the lease. What portion of the P560,000 should be shown as a current and long-term liability, respectively, in Nge's December 31, 2020 balance sheet? Current Liability Long-term Liability a. P0 P560,000 b. P140,000 P280,000 c. P280,000 P280,000 d. P280,000 P140,000
On January 1, 2020, Nge Company leased a building to Lol Corp. for a ten-year term at an annual rental of P140,000.
At inception of the lease, Nge received P560,000 covering the first two years' rent of P280,000 and a security deposit of
P280,000. This deposit will not be returned to Lol upon expiration of the lease but will be applied to payment of rent for the
last two years of the lease. What portion of the P560,000 should be shown as a current and long-term liability, respectively,
in Nge's December 31, 2020
Current Liability Long-term Liability
a. P0 P560,000
b. P140,000 P280,000
c. P280,000 P280,000
d. P280,000 P140,000
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