Question

On September 1, 2018, Stokes Company paid Eastport Rentals $37,000 for a 12-month lease on warehouse...

On September 1, 2018, Stokes Company paid Eastport Rentals $37,000 for a 12-month lease on warehouse space.

Required

Record the deferral and the related December 31, 2018, adjustment for Stokes Company in the accounting equation.

Record the deferral and the related December 31, 2018, adjustment for Eastport Rentals in the accounting equation.

Business   Accounting   
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Answer #1
For Stokes Company:
S.no. Cash + prepaid Liabilities + Common + Retained Revenue- Expense= Net Income
Rent     = Stock earnings
1 -37000 37000
2 -12333 -12333 12333 -12333
For Eastport Rentals
S.no. Cash + prepaid Unearned Common + Retained Revenue- Expense= Net Income
Rent     = revenue   + Stock earnings
1 37000 37000
2 -12333 12333 12333 12333
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