Cassidy Co. leased one of its buildings to another entity for five years on January 1,...
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Cassidy Co. leased one of its buildings to another entity for five years on January 1, 2021. The useful life of the building on this date is 20 years, and its carrying amount is P50,000,000. Rent is to be paid in advance as follows: Year Receipt 2021 P2,000,000 2022 1,600,000 2023 1,200,000 2024 1,500,000 2025 1,800,000 Cassidy also incurred P100,000 in securing the lease. 1. Determine the annual rent income to be recognized by Cassidy over the lease term. 2. Compute for the annual depreciation recognized on the building during the lease term. 3. Determine the rent receivable/unearned rent income to be presented on Cassidy's statement of financial position at the end of each year from 2021 to 2024. Cassidy Co. leased one of its buildings to another entity for five years on January 1, 2021. The useful life of the building on this date is 20 years, and its carrying amount is P50,000,000. Rent is to be paid in advance as follows: Year Receipt 2021 P2,000,000 2022 1,600,000 2023 1,200,000 2024 1,500,000 2025 1,800,000 Cassidy also incurred P100,000 in securing the lease. 1. Determine the annual rent income to be recognized by Cassidy over the lease term. 2. Compute for the annual depreciation recognized on the building during the lease term. 3. Determine the rent receivable/unearned rent income to be presented on Cassidy's statement of financial position at the end of each year from 2021 to 2024.
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1 As the lease is an operating lease as lease term is less then useful life of asset fair value of a... View the full answer
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
Posted Date:
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