Reporting Operating LeaseLessor

Solutions Inc. signs a 10-year lease for a building owned by Property Inc. that is appropriately classified as an operating lease by both the lessee and lessor. Lease payments are $150,000 per year. The building has an estimated useful life of 30 years with no salvage value. Assuming that the building has a fair value of $2,000,000 at the commencement of the lease, what amounts would Property Inc. recognize in its income statement (ignoring taxes) for the year ended December 31, 2020? Assume that Property Inc. is using the straight-line method to depreciate buildings.

• Note: Round your answers to the nearest whole dollar.
• Note: Do not use a negative sign with your answers.

Income Statement Item	Amount
Lease revenue	Answer
Depreciation expense	Answer