GreenGo Company leased equipment to RedStop Company on May 1, 2020. The lease expires on May 1, 2021. RedStop could have bought the equipment from GreenGo for P3,200,000 instead of leasing it. GreenGo's accounting records showed carrying amount for equipment on May 1, 2020 of P2,800,000. GreenGo’s depreciation on the equipment in 2020 was P360,000. During 2020, RedStop paid P720,000 in rentals to GreenGo for the 8-month period. GreenGo incurred maintenance and other related cost under the term of the lease of P60,000 in 2020. After the lease with RedStop expires, GreenGo will lease the equipment to another entity for two years. What is the rent expense incurred by RedStop for 2020?
GreenGo Company leased equipment to RedStop Company on May 1, 2020. The lease expires on May 1, 2021. RedStop could have bought the equipment from GreenGo for P3,200,000 instead of leasing it. GreenGo's accounting records showed carrying amount for equipment on May 1, 2020 of P2,800,000. GreenGo’s depreciation on the equipment in 2020 was P360,000. During 2020, RedStop paid P720,000 in rentals to GreenGo for the 8-month period. GreenGo incurred maintenance and other related cost under the term of the lease of P60,000 in 2020. After the lease with RedStop expires, GreenGo will lease the equipment to another entity for two years.
What is the rent expense incurred by RedStop for 2020?
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