11. As an inducement to enter a lease, Aris Company, a lessor, grants Hompson Company, a lessee, 9 months of free rent under a five-year operating lease.  The lease is effective on July 1, 2018 and provides for monthly rental of P100,000 to begin April 1, 2019.  In Hompson’s income statement for the year ended June 30, 2019 rent expense should be reported at A. P 300,000 B. P 1,020,000 C. P 255,000 D, P 900,000

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.