0PERATING LEASE

1. On January 2, 2021, Jack Company leased to Jill Company a heavy equipment for a period of 4 years,
for an annual rental of P800,000. Additionally Jack received a lease bonus of P200,000. A security
deposit of P250,000 was also paid by Jill, which is to be refunded upon expiration of the lease.

How much rental revenue should Jack company report for the year 2021? _850K_________

2. On May 1, 2021, RM Company leased to V Company a music studio for a period of 5 years. The
annual rental is P1,200,000. Additionally Jack received a lease bonus of P150,000.

For the year ended December 31, 2021, RM will report rent revenue of __1.230M___________

3. JiMin Company leased to Jungkook an office space in its building for five years beginning January 3,
2021. The lease contract specified the following terms: Rent for year 2021 and 2022 is P 180,000 per
annum. And P300,000 annually for the next three years. However, as inducement to enter the lease,
JiMin grant Jungkook the first four months rent-free.

How much rental revenue should JiMin report for the year ended December 31, 2021?___120K______

4. On January 2, 2020, Jhope leased a condo unit to Suga for 3 years. The total rental is P1,440,000
payable as follows:
12 months @ P30,000 360,000
12 months @ P40,000 480,000
12 months @ P50,000 600,000

All payments were made when due. For the year ended December 31, 2020,

The amount of rent revenue reported by Jhope for the year ended December 31, 2020, was?
_480K____

5. Using the data above, How much is Jhope’s rent receivable at December 31, 2020?__120K________

Use the following information for the next questions.

On Apri1, 2020, Jin Company leased a heavy equipment for a period of 4 years. The monthly rental is
P70,000. Additionally Jack received a lease bonus of P200,000. The cost of the equipment is P500,000,
with estimated useful life of 10 years and a residual value of P10,000. Jin uses straight-line method of
depreciation. During the year 2020, Jin incurred costs and expenses of P6,000 relating to the lease.

6. How much rent revenue was reported by Jin for the year ended Dec. 31, 2020?__667,500________

7. How much depreciation expense was recorded by Jin for the year ended Dec. 31, 2020?
__36,750____

8. What was the net rent revenue reported by Jin for the year ended Dec. 31, 2020?__624,750______

9. Also answer 3-15