a. Liberty Co entered into an agreement to lease office space on January 1, 2019 for a fixed period of five years. As an incentive to encourage the office space to be occupied, a first year rent-free period was included in the agreement after which, Liberty is required to pay an annual rental of P780,000. What amount should be recorded as rent expense if any for the year ended December 31, 2019?
Please have mercy please. Answer the two problems below. Please.
a. Liberty Co entered into an agreement to lease office space on January 1, 2019 for a fixed period of five years. As an incentive to encourage the office space to be occupied, a first year rent-free period was included in the agreement after which, Liberty is required to pay an annual rental of P780,000. What amount should be recorded as rent expense if any for the year ended December 31, 2019?
b. On January 1, 2020, an entity leased an equipment for four years at an annual rental of P170,000 payable at the end of each year. The estimated useful life of the equipment is four years. The present value factor of an ordinary annuity of 1 for four years of an implicit rate of 12% is 3.0373. The lease provides for a transfer of ownership of the equipment to the lessee at the end of the lease term. Compute for the
Step by step
Solved in 2 steps with 2 images
