Robin Company leased an office to Franky Company for a five-year term beginning January 1, 2020. Under the terms of the operating lease, rent for the first year is P 800,000 and rent for years 2 through 5 is P 1,250,000 per annum. However, as an inducement to enter the lease, Robin Company granted Franky Company the first six months of the lease rent-free. What amount should be reported as rental income for 2020? Show your solution.

Robin Company leased an office to Franky Company for a five-year term beginning January 1, 2020. Under the terms of the operating lease, rent for the first year is P 800,000 and rent for years 2 through 5 is P 1,250,000 per annum. However, as an inducement to enter the lease, Robin Company granted Franky Company the first six months of the lease rent-free. What amount should be reported as rental income for 2020? Show your solution.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 9Q

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