On January 1, 20x1, ABC enters into a 4-year lease of office equipment. The rent in 20x1 is ₱10,000and shall increase by 10% annually starting on January 1, 20x2. Rentals are payable at the end of each year. ABC Co. pays the lessor a lease bonus of ₱5,000 on January 1, 20x1. ABC Co. opts to use the practical expedient allowed under PFRS 16 for leases of low value assets. How much is the lease expense in 20x1?
On January 1, 20x1, ABC enters into a 4-year lease of office equipment. The rent in 20x1 is ₱10,000and shall increase by 10% annually starting on January 1, 20x2. Rentals are payable at the end of each year. ABC Co. pays the lessor a lease bonus of ₱5,000 on January 1, 20x1. ABC Co. opts to use the practical expedient allowed under PFRS 16 for leases of low value assets. How much is the lease expense in 20x1?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 20x1, ABC enters into a 4-year lease of office equipment. The rent in 20x1 is ₱10,000and shall increase by 10% annually starting on January 1, 20x2. Rentals are payable at the end of each year. ABC Co. pays the lessor a lease bonus of ₱5,000 on January 1, 20x1. ABC Co. opts to use the practical expedient allowed under PFRS 16 for leases of low value assets. How much is the lease expense in 20x1?
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