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- Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that it will owe 17,400 in property taxes for the year. On June 1, its property taxes are assessed at 17,000, which it pays immediately. Prepare the related journal entries for April 1, May 1, and June 1. Then compute the monthly property tax expense that Cee Co. would record during June through March.On January 1, Lessor Company signed a 1-year rental with quarterly payments of P100,000 due at the end of each quarter. In addition, the lessee must pay contingent rent of 5% of all sales in excess of P10,000,000. The contingent rent is paid in one payment on December 31. The same lessee has used the building for the past 5 years, and in each of those years the lessee reached the contingent rent threshold of P10,000,000 in sales. Sales of the lessee for the first two quarters are as follows: Quarter ended Amount March 31 P3,200,000 June 30 3,000,000 What amount of rent income should be reflected in Lessor’s quarterly income statement for the three months ended June 30?Oriole Company sublet a portion of its warehouse for five years at an annual rental of $71400, beginning on May 1, 2025. The tenant, Elizabeth Brown, paid one year's rent in advance, which Oriole recorded as a credit to Unearned Rent Revenue. Oriole reports on a calendar-year basis. The adjustment on December 31, 2025 for Oriole should be
- On January 1, Espinoza Moving and Storage leased a truck for a four-year period, at which time possession ofthe truck will revert back to the lessor. Annual lease payments are $10,000 due on December 31 of each year,calculated by the lessor using a 5% discount rate. If Espinoza’s revenues exceed a specified amount during thelease term, Espinoza will pay an additional $4,000 lease payment at the end of the lease. Espinoza estimates a60% probability of meeting the target revenue amount. What amount, if any, should be added to the right-of-useasset and lease liability under the contingent rent agreement?In January 1,2020, Orange Corporation leased a building to Juce Company under a four-year operating lease. The monthly rentals for 2020, 2021, 2022 and 2023 are as follows: 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. What amount should Orange Corporation report as rent receivable on December 31, 2020?On October 1, 2021, Sputnik V Company leased from Gamaleya Company a set of furniture, which Sputnik will use for a period of 12 months. On this date, Sputnik paid the annual rental of P36,000 plus P3,000 incentive to Gamaleya as an inducement to grant the rental for a considerably short period of time. Sputnik reports on a calendar-year basis. How much is the rent expense reported in Sputnik V Company’s profit or loss for the year ended December 31, 2021?
- On January 1, 2018, JOSH Corporation leased out an office space for 15 years to PH Corporation at an monthly rental of P60,000. On the same date, JOSH received the following amounts from PH: Annual rental for year 2018 and 2019 Security deposit amounting to P100,000 In addition, PH agreed that it will pay the insurance on the leased property during the first three years of the lease contract amounting to P100,000 per year. Records show that on April 1, 2020, PH introduced leasehold improvement which will be transferred to JOSH upon the end of the lease term. The cost of construction totalled P6,375,000 with the estimated useful life of 20 years. How much should PH report as deductible expense for 2020?On January 1, Espinoza Moving and Storage leased a truck for a four-year period, at which time possession of the truck will revert back to the lessor. Annual lease payments are $10,000 due on December 31 of each year, calculated by the lessor using a 5% discount rate. If Espinoza’s revenues exceed a specified amount during the lease term, Espinoza will pay an additional $4,000 lease payment at the end of the lease. Espinoza estimates a 60% probability of meeting the target revenue amount. What amount should be added to the right-of-use asset and lease liability under the contingent rent agreement?On July 1, 2020, Nami Company leased office premises for a three-year period at an annual rental of P 360,000 payable on July 1 each year. The first rent payment was made July 1, 2020. Additionally on July 1, 2020, Nami Company paid P 240,000 as a lease bonus to obtain a three-year lease instead of the lessor’s usual term of six years. On December 31, 2020, what amount should be reported as prepaid rent? Show your solution.
- AB leases 100 desk phones for use in one of its offices. The contract term states that there will be an annual rental payment of R9 000 for eight years. The lease arrangement begins on 1 July 20x0. As an incentive to AB, no payment is required in the first year. The desk phones are to be classified as low-value items.Prepare the correct debit or credit entry that would be required in Entity AB’s income statement for the year ended 30 June 20x1 in respect of the above transaction.Megan Appliances leased an office space from Cindy Real Estate, Inc on July 1, 2020. The lease contract is 8 years. The rental payment of P600,000 is payable in advance, every July 1 starting July 1, 2020. Implicit rate is 10%. Cindy Real Estate is a dealer of office space and makes a profit through its leasing business. The carrying value of the office space on Cindy’s records is 2,800,000. Megan guaranteed the residual value of P100,000 upon its return of the asset to Cindy. Relevant PV factors are shown below:· PV of annuity due for 8 periods at 10%: 5.87· PV of ordinary annuity for 8 periods at 10%: 5.33· PV of 1 for 8 periods at 10%: 0.47How much is the dealer’s profit to be recognized by Cindy on commencement date? a. 769,000 b. 2,753,000 c. 3,569,000 d. None – this is a direct finance leaseOn January 1, 2006, Solitaire Company leased equipment for 7 years. The lease required an annual payment of $25,000 each for the first 4 years and an annual payment of $15,000 each for the remaining years. The lease agreement required Solitaire Company to pay $5,000 as annual insurance premium. On December 31, 2006, Solitaire Company paid $3,800 for repairs. Which of the following amounts was recorded as the rental revenue by the lessor at the end of Year 5? $25,000 $15,000 $20,000 $18,800
