Reference no: EM132616192

On September 1, 2020, Abby Realty leased a piece of land to Kyla Company for an initial period of 12 months with a provision for a continuation on a month-to-month basis. The lease is properly classified as an operating lease.

Lease payments are to be made as follows:

First four months - P 7,500 per month

Next three months - P 10,000 per month

Next three months - P 12,000 per month

Last two months - P 15,000 per month

After the first year, the rent continues at P18,000 per month.

REQUIRED:

Question (a) Compute the Rent Expense reported in Kyla Company's profit or loss for year ended December 31, 2020.

Question (b) Compute the Rent Payable reported in Kyla Company's statement of financial position at December 31, 2020.