Question: Wall Co. leased office premises to Fox, Inc. for a fiveyear term beginning January 2, 2011. Under the terms of the operating lease, rent for

Wall Co. leased office premises to Fox, Inc. for a fiveyear term beginning January 2, 2011. Under the terms of the operating lease, rent for the first year is $8,000 and rent for years two through five is $12,500 per annum. However, as an inducement to enter the lease, Wall granted Fox the first six months of the lease rent-free. In its December 31, 2011 income statement, what amount should Wall report as rental income?

a. $12,000

b. $11,600

c. $10,800

d. $ 8,000

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