On Jan 1, 2016, Eminem leased his vacant lot for a period of 12 years to Dr. Dre at an annual rate of P2,400,000. The lease contract provides, among others that Dr. Dre will construct a 5-storey building for paring purposes at a cost of P36,000,000.Ownership of the building shall belong to Eminem upon the expiration or termination of the lease contract. The building was completed on Jan 1,2018 with an estimated useful life of 15 years. It was also agreed that Juan will pay the following in 2016: P 4,800,000 representing rental payment for two (2) years, and P 2,400,000 Security deposit. Eminem shall report total income from the lease in 2016 at?" A.2,400,000 B.4,800,000 C.7,200,000 D.43,200,000
On Jan 1, 2016, Eminem leased his vacant lot for a period of 12 years to Dr. Dre at an annual rate of P2,400,000. The lease contract provides, among others that Dr. Dre will construct a 5-storey building for paring purposes at a cost of P36,000,000.Ownership of the building shall belong to Eminem upon the expiration or termination of the lease contract. The building was completed on Jan 1,2018 with an estimated useful life of 15 years. It was also agreed that Juan will pay the following in 2016: P 4,800,000 representing rental payment for two (2) years, and P 2,400,000 Security deposit. Eminem shall report total income from the lease in 2016 at?" A.2,400,000 B.4,800,000 C.7,200,000 D.43,200,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 9MC
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On Jan 1, 2016, Eminem leased his vacant lot for a period of 12 years to Dr. Dre at an annual rate of P2,400,000. The lease contract provides, among others that Dr. Dre will construct a 5-storey building for paring purposes at a cost of
P36,000,000.Ownership of the building shall belong to Eminem upon the expiration or termination of the lease contract. The building was completed on Jan 1,2018 with an estimated useful life of 15 years. It was also agreed that Juan will pay the following in 2016: P 4,800,000 representing rental payment for two (2) years, and P 2,400,000 Security deposit. Eminem shall report total income from the lease in 2016 at?"
A.2,400,000
B.4,800,000
C.7,200,000
D.43,200,000
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