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?

Transcribed Image Text:

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. 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.

Answer rating: 100% (QA)

12 aOn December 31 2020 what amount should be recognized as current liability 13 14 Amoun... View the full answer