WITH SOLUTION/COMPUTATION 61. At the beginning of current year. An entity leased office space for five years at an annual rental of P700,000 under an operating lease. On the same date, the entity incurred the following amounts: Bonus to obtain lease 300,000 First year’s rent 700,000 Last year’s rent 700,000 Security deposit refundable at lease expiration 800,000 Installation of new walls and offices 750,000 Insurance 50,000 Property taxes 40,000 Initial direct cost 100,000 What total amount of the expenses relating to the rent of office space should be reported for the current year? a. 1,100,000 b. 1,000,000 c. 1,800,000 d. 1,340,000
WITH SOLUTION/COMPUTATION
61. At the beginning of current year. An entity leased office space for five years at an annual rental of P700,000 under an operating lease. On the same date, the entity incurred the following amounts:
Bonus to obtain lease 300,000
First year’s rent 700,000
Last year’s rent 700,000
Security deposit refundable at lease expiration 800,000
Installation of new walls and offices 750,000
Insurance 50,000
Property taxes 40,000
Initial direct cost 100,000
What total amount of the expenses relating to the rent of office space should be reported for the current year?
a. 1,100,000
b. 1,000,000
c. 1,800,000
d. 1,340,000
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