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What amount of net rent revenue should be reported

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Reference no: EM132820136

Problem 1: Thunder Company purchased a tractor on January 1, 2018 at a cost of P1,600,000 for the purpose of leasing it. The tractor is estimated to have a useful life of 5 years with residual value of P100,000. Depreciation is on a straight line basis. On April 1, 2018, Thunder entered into a lease contract for the lease of the tractor for a term of two years up to March 31, 2020. The lessee paid P600,000, the lease fee for one year. Thunder paid P120,000 commission associated with negotiating the lease, P15,000 minor repairs and P10,000 transportation of the tractor to the lessee during the year. What amount of net rent revenue should be reported for the current year?

A. 80,000

B. 85,000

C. 160,000

D. 235,000

Reference no: EM132820136

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