One of the offices in ABC’ building is rented out to Mountain
Co. for $500
each month. On September 16, 2020, Mountain Co. paid for the rent
from October
through December of 2020 (income statements are issued quarterly).
At the end of the year,
Mountain Co. pays rent for another 6 months for January 1, 2021 to
June 31, 2021.
Make the appropriate adjusting entry.
In the books of ABC
Date | General | Debit | Credit |
Dec 31, 2020 | Cash | 3,000 | |
Unearned revenue | 3,000 | ||
Mar 31, 2021 | Unearned revenue | 1,500 | |
Rent revenue | 1,500 | ||
June 30, 2021 | Unearned revenue | 1,500 | |
Rent revenue | 1,500 |
In the books of Mountain Co.
Date | General | Debit | Credit |
Dec 31, 2020 | Prepaid rent | 3,000 | |
Cash | 3,000 | ||
Mar 31, 2021 | Rent expense | 1,500 | |
Prepaid rent | 1,500 | ||
June 30, 2021 | Rent expense | 1,500 | |
Prepaid rent | 1,500 |
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