Question: As an inducement to enter a lease, Arts, Inc., a lessor, grants Hompson Corp., a lessee, nine months of free rent under a five-year operating

As an inducement to enter a lease, Arts, Inc., a lessor, grants Hompson Corp., a lessee, nine months of free rent under a five-year operating lease. The lease is effective on July 1, 2011 and provides for monthly rental of $1,000 to begin April 1, 2012. In Hompson’s income statement for the year ended June 30, 2012, rent expense should be reported as

a. $10,200

b. $ 9,000

c. $ 3,000

d. $ 2,550

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