On Jauary 1, 2020, Nice Company signed a 10-year operating lease for office space at P 576,000 per year. The lease included a provision for additional rent of 5% annual company sales in excess of P 3,000,000. Upon execution of the lease,Nice paid P 144,000 as a bonus for the lease. How much should be Nice's rent expense for the year ended Dec. 31, 2020?

On Jauary 1, 2020, Nice Company signed a 10-year operating lease for office space at P 576,000 per year. The lease included a provision for additional rent of 5% annual company sales in excess of P 3,000,000. Upon execution of the lease,Nice paid P 144,000 as a bonus for the lease. How much should be Nice's rent expense for the year ended Dec. 31, 2020?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 9MC

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