On January 1, 20x1, REMNANT Co. leased an office space from REMAINDER, Inc. under an operating lease with the following information:

Annual rent 200,000

Lease bonus paid to REMAINDER 40,000

Security deposit paid to REMAINDER 30,000

Lease term 5 years

Additional information:

Annual rental payment includes P10,000 to cover insurance taken by REMAINDER on the leased property. First rental payment is due on December 31, 20x1 and at each year-end thereafter

The security deposit will be returned to REMNANT at the end of the lease term. The appropriate discount rate is 10%

Requirement: Provide all journal entries in the books of REMNANT (Lessee) and REMAINDER (Lessor).