On January 1, 20x1, Lock Co. enters into a 4-year lease of office equipment. The rent in 20x1 is P10,000 and this will increase by 10% annually starting on January 1, 20x2. Lock Co. pays the lessor a lease bonus of P5,000 on January 1, 20x1. Lock 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? а. 10,000 b. 11,000 c. 11,603 d. 12,853

On January 1, 20x1, Lock Co. enters into a 4-year lease of office equipment. The rent in 20x1 is P10,000 and this will increase by 10% annually starting on January 1, 20x2. Lock Co. pays the lessor a lease bonus of P5,000 on January 1, 20x1. Lock 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? а. 10,000 b. 11,000 c. 11,603 d. 12,853

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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