Problem 6On January 1, 2021, Blackpink Company leased a building to Itzy Company under a four-year operatinglease.The monthly rental for 2021, 2022, 2023, and 2024 is P100,000, P150,000, P200,000, and P250,000,respectively. Rentals are payable at the end of each month. All rental payments within the year weremade when due.1. What amount should be reported as rent income for 2021?2. On December 31, 2022, what amount should be reported as rent receivable?a. 1,000,000b. 1,200,000c. 600,000d. 900,000

Operating lease is a type of lease agreement where in the lease term is set to less than the useful…

Answered: 1. What amount should be reported as…

1. What amount should be reported as rent income for 2021? 2. On December 31, 2022, what amount should be reported as rent receivable? a. 1,000,000 b. 1,200,000 c. 600,000 d. 900,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 53BE: Unearned Rent Revenue Mannion Property Management leases commercial properties and expects its...

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Problem 6
On January 1, 2021, Blackpink Company leased a building to Itzy Company under a four-year operating
lease.
The monthly rental for 2021, 2022, 2023, and 2024 is P100,000, P150,000, P200,000, and P250,000,
respectively. Rentals are payable at the end of each month. All rental payments within the year were
made when due.
1. What amount should be reported as rent income for 2021?
2. On December 31, 2022, what amount should be reported as rent receivable?
a. 1,000,000
b. 1,200,000
c. 600,000
d. 900,000

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