On January 1,2019, Glen Company leased a building to Mix Company for 10-year term at an annual rental of P500,000. At inception of the lease, Glen received P2,000,000 covering the first two years rent of P1,000,000 and a security deposit of P1,000,000. This deposit will not be returned to Mix Company upon expiration of the lease but will be applied to payment of rent for the last two years of the lease. 1. What portion of the P2,000,000 should be reported as current liability on December 31, 2019? a. 1,500,000 b. 1,000,000 c. 500,000 d. 0 2. What portion of the P2,000,000 should be reported as noncurrent liability on December 31,2019
On January 1,2019, Glen Company leased a building to Mix Company for 10-year term at an annual rental of P500,000. At inception of the lease, Glen received P2,000,000 covering the first two years rent of P1,000,000 and a security deposit of P1,000,000. This deposit will not be returned to Mix Company upon expiration of the lease but will be applied to payment of rent for the last two years of the lease. 1. What portion of the P2,000,000 should be reported as current liability on December 31, 2019? a. 1,500,000 b. 1,000,000 c. 500,000 d. 0 2. What portion of the P2,000,000 should be reported as noncurrent liability on December 31,2019
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 January 1,2019, Glen Company leased a building to Mix Company for 10-year term at an annual rental of P500,000. At inception of the lease, Glen received P2,000,000 covering the first two years rent of P1,000,000 and a security deposit of P1,000,000.
This deposit will not be returned to Mix Company upon expiration of the lease but will be applied to payment of rent for the last two years of the lease.
1. What portion of the P2,000,000 should be reported as current liability on December 31, 2019?
a. 1,500,000
b. 1,000,000
c. 500,000
d. 0
2. What portion of the P2,000,000 should be reported as noncurrent liability on December 31,2019?
a. 2,000,000
b.1,000,000
c. 1,500,000
d. 0
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