ecause the fair value of the property cannot be determined reliably without undue cost or effort on an ongoing basis. No lease amount is payable for the first four years of the lease. The single lease payment of P1,500,000 is due on January 1, 2019. What amount of unearned rental should Melody Company recognize on January 1, 2023?
On January 1, 2019, Melody Company entered, as a lessor, into a five-year non-cancelable operating lease of a building it completed constructing earlier that day at a cost of P8, 000, 000. The building has an economic life of 60 years and nil residual value. The company accounts for the building as property, plant and equipment using the cost model because the fair value of the property cannot be determined reliably without undue cost or effort on an ongoing basis. No lease amount is payable for the first four years of the lease. The single lease payment of P1,500,000 is due on January 1, 2019. What amount of unearned rental should Melody Company recognize on January 1, 2023?
none
300,000
600,000
1,200,000
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