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August 1, 2021, Mega Tech Inc leased a computer from Serena Tech Co. for a period of one year.

The rentals are payable at the beginning of each month starting August 1, 2021.

The lease agreement called for the first 6 months rental to be P5,000 per month while the last 6 months rental to be P6,000 per month.

What amount shall be reported as operating lease payable on December 31, 2021? A. 5,500 B. 2,500 C. 4,000 D. 9,500

Correct Answer is B. 2500

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