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Question - On April 1, 2020, Thaliana & Co. leased a computer from Steffany Inc. under a five-year lease contract. Thaliana opted for a PFRS 16 operating lease model since the contract involves a low value asset. Total rent payments for the whole lease term (60 months) are as follow:
First 9 months: 200,000 per month
Next 18 months: 100,000 per month
Next 12 months: 80,000 per month
Next 14 months: 50,000 per month
Remaining 7 months: 70,000 per month
How much is the total rent expense to be recognized by Thaliana for the year 2020?
a. 5,750,000
b. 1,800,000
c. 1,150,000
d. 862,500
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