RENT expense/Adjusting Entries
I've had a similar problem like this before and need some help trying to just make sure I'm doing things right. Any help would be greatly appreciated since I know I am wrong :(
Bal at end Sept 30,19xx
Cash 18,000 D
Rent Payable 0
Fees Earned 140,000 C
Rent Expense 13,200 D
Year end adjustments:
A. The lease for the office requires the company to pay total rent for the year equal to 10% of the company's annual revenues. The rent is paid to the building owner with monthly payments of $1,100. If the annual rent exceeds the total monthly payments, the company must pay the excess. If the total is less than the amount previously paid, the owner will refund the difference.
Here is my issue. I'm not sure if the "Fees earned" would be my Revenues? Because even though there are a few more accounts I could put up, this is the only one in the "400" account number.
And if that is my annual Rev, how do I go about figuring what the adjustment would be?