On January 1,2019, Glen Company leased a building to Mix Company for 10-year term at an annual rental of P500,000. At inception of the lease, Glen received P2,000,000 covering the first two years rent of P1,000,000 and a security deposit of P1,000,000. This deposit will not be returned to Mix Company upon expiration of the lease but will be applied to payment of rent for the last two years of the lease. What amount should be reported as current and noncurrent liability in December 31, 2020 statement of financial position? a. 0 2,000,000 b. 500,000 1,000,000 c. 1,000,000 1,000,000 d. 1,000,000 500,000
On January 1,2019, Glen Company leased a building to Mix Company for 10-year term at an annual rental of P500,000. At inception of the lease, Glen received P2,000,000 covering the first two years rent of P1,000,000 and a security deposit of P1,000,000. This deposit will not be returned to Mix Company upon expiration of the lease but will be applied to payment of rent for the last two years of the lease. What amount should be reported as current and noncurrent liability in December 31, 2020 statement of financial position? a. 0 2,000,000 b. 500,000 1,000,000 c. 1,000,000 1,000,000 d. 1,000,000 500,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1,2019, Glen Company leased a building to Mix Company for 10-year term at an annual rental of P500,000. At inception of the lease, Glen received P2,000,000 covering the first two years rent of P1,000,000 and a security deposit of P1,000,000.
This deposit will not be returned to Mix Company upon expiration of the lease but will be applied to payment of rent for the last two years of the lease.
What amount should be reported as current and noncurrent liability in December 31, 2020
a. 0 2,000,000
b. 500,000 1,000,000
c. 1,000,000 1,000,000
d. 1,000,000 500,000
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