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Problem - A lessee leased an office space for 5 years. The useful life of the asset is 10 years. The commencement date was January 1, 2020. The lease payments are based on 10% sales at the end of each period. The implicit interest rate is 8%.
The sales for each year are as follows:
2020 - P10,000,000
2021 - P12,000,000
2022 - P 9,000,000
2023 - P10,500,000
2024 - P13,800,000
Required - How much is the rent expense for 2022?
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