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On 01.012022 the company agrees with the tenant to leave the lease before the end date 31.12.2025. The monthly rent is €100. In order to leave, it is agreed to give compensation of all rents from the company to the tenant. That is, €3600.00 will be given as compensation.
What accounting entry will be made at the end of each year?
Will uncollected revenue be recorded?
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Solved in 4 steps
- Windsor Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information relates to this agreement. 1. 2. 3. 4. 5. Prepare all of the journal entries for the lessor for 2020 and 2021 to record the lease agreement, the receipt of lease payments, and the recognition of revenue. Assume the lessor's annual accounting period ends on December 31, and it does not use reversing entries. (Credit account titles are automatically inden when amount is entered. Do not ind manually. Record journal entries in the order presented in the problem.) Date 20 0 /20 The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. The cost of the asset to the lessor is $230,000. The fair value of the asset at January 1, 2020, is $230,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $24,339, none of which is…25. On January 1, 2019, Rapp company leased a new machine to Lake company. The lease expires on January 1, 2024. The annual rental is 900,000. Additionally on January 1, 2019, Lake company paid 500,000 to Rapp company as a lease bonus and 250,000 as a security deposit to be refunded upon the expiration of the lease. What amount should be reported as rent revenue for the current year?In January 1,2020, Orange Corporation leased a building to Juce Company under a four-year operating lease. The monthly rentals for 2020, 2021, 2022 and 2023 are as follows: P100,000, P150,000, P200,000 and P250,000, respectively. Rentals are payable at the end of each month. All rental payments within the year were made when due. What amount should Orange Corporation report as rent receivable on December 31, 2020?
- On June 30, 2020, Rentank received P750,000 advance payment from clients. The contract covers 3 years rent for the oil tanks. 18. Prepare the initial entries to record the given loan. 19. What are the accounts involved in the adjusting entries? 20. Prepare the adjusting entries.On January 1, 2021, Maroon Company entered into a five-year nonrenewable operating lease, commencing on that date, for office space. The office space has a useful life of 50 years and the lease specifies a rent of P20,000 per month. How much is the rent receivable or unearned rent income at the end of 2022?On July 1, 2019, Park Company leased office space for ten years to Rudd at a monthly rental of $15,000, and received the following amounts as listed in the table below. Rude made timely rent payments through November 2019; the December rent was paid, together with January 2020 rent, on January 6, 2020. At December 31, 2019, park should report rent receivable of? First Month Rent $ 15,000 Security Deposit $ 25,000 a. $0 b. $ 5,000 c. $15,000 d. $30,000
- The pre-collection/advanced collection is P60,000. This is applicable for a six- month rental period ending January 31, 2021. The financial statements to be prepared is dated December 31, 2020. What is the income and unearned income amounts that would be reported in the financial statements, respectively?On 1 January 2022 Hull Ltd entered into a 10-month lease for a retail unit. Lease rent were £12,000 per month payable in advance. As an incentive however, Hull Ltd was given the first month as a rent-free period. Required Calculate the rent expense which should be recognised in Hull Ltd' statement of profit or loss for the year ended 31 March 2022. Assume that Hull Ltd elects to use the short-term lease exemption under IFRS 16.Ebasan Company leased a building to Bu Corporation on January 1 2021. The lease expires on January 1 2026. The annual rental is P3,000,00D. Additionally, on January 1, 2021, Bu paid P500,000 as a lease bonus and P250,000 as a security deposit to be refunded upon expiration of the lease. Ebasan paid P150,000 to a real estate broker as finder fee. During 2021, Ebasan incurred insurance and property tax expense of P100,000. The building was depreciated P150,000 per year. What amount should Ebasan recognize as net rental revenue for 2021?
- A lessor leased out an office space for 5 years on January 1, 2020. The lease was properly accounted for as an operating lease. The rental payment are as follows: first to second year - P300,000 per month third to fifth year - P36,000 per month The lease contract provides for a 6-month advance and 1 month security deposit. The lessee also paid a P60,000 lease bonus to obtain the lease. The security deposit will be returned at the end of the lease. The advances may be applied against the last three months of the lease. QUESTION: How much is the rent receivable/ unearned rent as of December 31, 2021? show complete solution pleaseOn 01/01/2019, Flowers Ltd. entered into a contract with Daisy Ltd. to lease a non-current asset for 3 years. To obtain the lease, Daisy Ltd. incurs in initial direct costs of £7,000 that are paid in credit. Daisy Ltd. must pay £12,000 each year with the lease payments commencing on 31/12/2019. Daisy Ltd. can borrow at a rate of 11% each year. At the end of the lease contract, the ownership of the non-current asset will not be transferred to Daisy Ltd. The useful life of the non-current asset is 10 years. Required: a) After doing the necessary calculations, draw all the journal entries for years 2019, 2020 and 2021 for Daisy Ltd. considering the accounting treatment of the leasing contract from the point of view of Daisy Ltd. b) Describe the accounting treatment for Flowers Ltd (calculations and journal entries are not required for this question). c) How would the accounting treatment change for Daisy Ltd and Flowers Ltd if, at the end of the contract, the ownership of the non-current…Happy Company grants Incredible Company first month rent-free under a 12-month lease for low-value assets such as furniture, tablets, and laptops. The lease is effective August 1, 2021 and provides for a monthly rental of P12,000, payment of which will begin on September 1, 2021.How much is the rent expense reported in Happy Company’s profit or loss for the year ended December 31, 2021?
