Case 3: On January 1, 2021, Abbo Company leased a building to Bee Company under a four operating lease. The monthly rental for 2021, 2022, 2023, and 2024 was P200,000, P300 P400,000 and P500,000, respectively. Rentals are payable at the end of each month. All payments within the year were made when due. The lessor provides for 6-month free rent. a. How much is the rent income to be recognized in 2021? b. How much is the rent receivable as of 2021? c. How much is the rent income to be recognized in 2022? d. How much is the rent receivable as of 2022?

19 On September 30, 2024, Truckee Garbage leased equipment from a supplier and agreed to pay $125,000 annually for 15 years beginning September 30, 2025. Generally accepted accounting principles require that a liability be recorded for this lease agreement for the present value of scheduled payments. Accordingly, at inception of the lease, Truckee recorded a $1,214,031 lease liability. Determine the interest rate implicit in the lease agreement. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

On December 1, 2020, Carlos entered into a lease on a building for use in his business for $1,500 per month. Under the lease terms, Carlos pays 12 months’ rent ($18,000) in advance on December 1.  How much can Carlos deduct for rent in 2020?   a. $18,000   b. $1,000   c. $13,000   d. $12,000

Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $126,890. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)      Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $16,700 at the beginning of each period Economic life of asset 2 years Fair value of asset $126,890 Implicit interest rate 6% (Also lessee’s incremental borrowing rate)    Required:Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022. Amortization of the right-of-use asset is recorded at the end of each fiscal year (December 31) on a straight-line basis.