Question

On September 1, a company received cash of $9,336 for one year’s rent in advance and...

On September 1, a company received cash of $9,336 for one year’s rent in advance and recorded the transaction on that day as a credit to rent revenue.

The amount (value) to be recorded on December 31 adjusting entry would be:

(When writing your answer do not use commas or sign of the dollar. For example, if your answer is $1,500, write it as 1500)

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Answer #1

6224

Rent Revenue Account                                     6224

      Unearned Rent Revenue                6224

Rent revenue for one year is $9,336 and this amount is credited in rent revenue account. Actually 4 months(from September 1 tot 31 December) Rent revenue is only earned and balance (8 months)should be transferred from Rent revenue to unearned rent revenue.      

         Unearned Rent Revenue = 9336/12*8 = 6224 Actual rent revenue is 3112.

                

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