On January 1, 20×1, ABC Co. enters into a 4-year lease of office equipment.

The rent in 20×1 is ₱10,000 and shall increase by 10% annually starting on January 1, 20×2. Rentals are payable at the end of each year. ABC Co. pays the lessor a lease bonus of ₱5,000 on January 1, 20×1. ABC Co. opts to use the practical expedient allowed under PFRS 16 for leases of low value assets. How much is the lease expense in 20×1?

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