Question: a.On December 31, 2020, what amount should be recognized as current liability? b.On the same date, what amount should be recognized as a noncurrent liability?

PROBLEM 2On January 1, 2020, Joyful Company leased a building to Desperate Company for a ten-year term, at an annualrental

a.On December 31, 2020, what amount should be recognized as current liability?

b.On the same date, what amount should be recognized as a noncurrent liability?

PROBLEM 2 On January 1, 2020, Joyful Company leased a building to Desperate Company for a ten-year term, at an annual rental of Php 1,000,000. At inception of the lease, Joyful Company received Php 4,000,000 covering the first two years' rent of Php. 2,000,000 and a security deposit of Php 2,000,000. This deposit will not be returned to Desperate Company upon expiration of the lease but will be applied to payment of rent for the last two years of the lease.

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