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 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? of
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 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? of
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
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 6RE
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Transcribed Image Text: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 fırst 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?
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