Conn Company owns an office building and normally charges tenants P3,000 per square meter per year per office space. Because the occupancy rate is low, Conn Company agreed to lease 1,000 square meters to Hanson Company at P1,200 per square meter for the first year of a 3 year operating lease. Rent for remaining years will be at the P3,000 rate. Hanson moved into the building and paid the first year’s rent in advance on January 1, 2021. 1. What amount of rental revenue should Conn Company report in its income statement for the year ended October 31, 2021?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Conn Company owns an office building and normally charges tenants P3,000 per square meter per year per office space. Because the occupancy rate is low, Conn Company agreed to lease 1,000 square meters to Hanson Company at P1,200 per square meter for the first year of a 3 year operating lease. Rent for remaining years will be at the P3,000 rate. Hanson moved into the building and paid the first year’s rent in advance on January 1, 2021.

1. What amount of rental revenue should Conn Company report in its income statement for the year ended October 31, 2021?

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