On May 1, 2021, SEVEN Co. signed a five-year operating lease for office space at P240,00 per year. As an inducement to enter the lease, the lessor granted SEVEN, months of free rent. The lease is effective May 1, 2021 and provides for a monthly rental of P20,000 beginning February 1, 2022. The lease included a provision for additional rent of 5% annual company sales in excess of #2,000,000. SEVEN's sales for the period ended December 31, 2021 was #2,600,000. Upon execution of the lease, SEVEN also paid $144,000 as a bonus for the lease and $40,000 as a security deposit to be refunded upon lease expiration