The following transaction pertains to the 2007 accounting period.
How would I make the following adjusting entry?
02/01 I rec'd 3600 of rent for one year paid in advance by a tenant.
I am thinking
Dr cash 3300
Cr prepaid rent expense 3300
Thanks
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The following transaction pertains to the 2007 accounting period.
How would I make the following adjusting entry?
02/01 I rec'd 3600 of rent for one year paid in advance by a tenant.
I am thinking
Dr cash 3300
Cr prepaid rent expense 3300
Thanks
When you receive the money on feb the first you should record the following entry:
Dr. Cash 3,600
Cr. Unearned rent revenue 3,600
Unearned rent revenue is a liability account that should be reduced each month. So on the end of feb you should record the following adjusting entry:
Dr. Unearned revenue 300
Cr. Rent revenue 300
This entry should be performed each month
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