On December 1, year 1, Tom V. Company entered into an operating lease for office space for its executives for 10 years at a monthly rental of $ 300,000. On that date, Tom V. paid the landlord the following amounts: First month’s rent $ 300,000 Last month’s rent 300,000 Installation of new carpet 600,000 $ 1,200,000 The entire amount was charged to rent expense in year 1. What amount should Tom V. have charged to expense for the year?
a. $ 1,200,000
b. $ 300,000
c. $ 200,000
d. $ 305,000