Unearned rent verses prepaid rent
I would like for someone to help me get a better prospective on this use of words that keeps me confused.
d. The unearned rent account balance at August 31 is $9,375, representing the receipt of an advance payment on August 1 of three months' rent from tenants.
That is pretty clear it is rent I received $9375 div by 3 = 3125
debit 3125 for unearned rent
then credit 3125 for rent revenue.
another problem says it is " rent unearned at Dec 31 of $1500
so am I just posting this ($1500) or is it similar to the prepaid rent and I need to subtract it from the original balance of $3600?
I basically need to get an idea in my head as to how to comprehend the difference in the wording.
Thanks for so far you have been great.
Bgriffi:)