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, 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?
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...
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- 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?
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