1. Per ASC 842 What the company has to assess in order to determine whether a contract contains a lease?
2. Per ASC 842 What can be an example of Nonlease components?

3, Describe the accounting treatment per ASC 842 for operating leases supported by double entires. Make necessary assumption if needed

Contract details:

Contractual Rent Term = 3 years (starting 2/1/20)

Commencement date - 14/1/20

Rent rates:

Y1, months 1-3 = free

Y1, months 4-12 = 18 000 USD

Y2 = 40% increase

Y2 month 10-12 - covid 19 discount for 10%

Y3=30 000 USD

Additional costs related to lease execution paid at lease ceommencement:

a) facility manager bonus for signing a lease contract - 2000 USD

b) Broker's fee - 5 000 USD

c) Lessee has gained early access to lease premises to start making necessary fit-outs 3 month prior to contractual start date

4, Build payment schedule based on the below terms (following the ACS 842 rules). Make necessary assumptions if needed

• lease term 12/17/2018-12/16/2025
• The rent shall be paid in advance by the 14th day of every month
• Office area phase 1: 1337.13 sq.m; Phase 2: 504,55 sq.m.; Ancillary Area: 233,49
• Parking spaces 2 places (#3,32 on the plan); 3 places (in garage area)
• contract currency - EUR, payment currency - PLN
• During the first 22 months of the lease phase 1, during 19 month of the lease phase 2 monthly rent:

9.50 per sq.m

75 EUR for 2 parking places

68 EUR for 3 parking places

afterwards: 15% increase to all premises; annual indexation, subject for official letter from the landlord. Not less than 3%