Wall Company leased office premises to Fox Company for a 5 year term beginning January 1, 2021. Under the terms of the operating lease, rent for the first year is P800,000 and rent for years 2 through to 5 is P1,250,000 per annum. However, as an inducement to enter the lease, Wall Company granted Fox Company the first 3 months of the lease rent free. 1. In its December 31, 2021 income statement, what amount should Wall Company report as rental income? 2. In its December 31, 2021 statement of financial position, what amount should Wall Company report as rent receivable?
Wall Company leased office premises to Fox Company for a 5 year term beginning January 1, 2021. Under the terms of the operating lease, rent for the first year is P800,000 and rent for years 2 through to 5 is P1,250,000 per annum. However, as an inducement to enter the lease, Wall Company granted Fox Company the first 3 months of the lease rent free. 1. In its December 31, 2021 income statement, what amount should Wall Company report as rental income? 2. In its December 31, 2021 statement of financial position, what amount should Wall Company report as rent receivable?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Wall Company leased office premises to Fox Company for a 5 year term beginning January 1, 2021. Under the terms of the operating lease, rent for the first year is P800,000 and rent for years 2 through to 5 is P1,250,000 per annum. However, as an inducement to enter the lease, Wall Company granted Fox Company the first 3 months of the lease rent free.
1. In its December 31, 2021 income statement, what amount should Wall Company report as rental income?
2. In its December 31, 2021 statement of financial position , what amount should Wall Company report as rent receivable?
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