Sun received a lump sum premium of $300,000 on 1 October 2020 in respect of granting a lease of 5 years. How much will be assessable in 2020/21 when the premium is received? Select one: a. $300,000 b. $100,000 c. $150,000 d. $50,000

Sun received a lump sum premium of $300,000 on 1 October 2020 in respect of granting a lease of 5 years. How much will be assessable in 2020/21 when the premium is received? Select one: a. $300,000 b. $100,000 c. $150,000 d. $50,000

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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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

Mr Sun received a lump sum premium of $300,000 on 1 October 2020 in respect of granting a lease of 5 years. How much will be assessable in 2020/21 when the premium is received?

Select one:

$300,000

$100,000

$150,000

$50,000

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