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26 January, 13:26

XYZ Company received $18,000 on April 1, 2020 for one year's rent in advance and recorded the transaction with a credit to a nominal account. The December 31, 2020 adjusting entry is

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  1. 26 January, 14:57
    0
    Dr Rent revenue

    Cr Unearned rent revenue, $4,500

    Explanation:

    Preparation of XYZ Company Journal entry

    Since we were told that the Company received the amount of $18,000 on April 1, 2020 for a one year's rent paid in advance in which the transaction has a credit to a nominal account, this means we have to record the transaction by Debiting Rent revenue with 4,500 and Crediting Unearned rent revenue, with the same amount of $4,500 calculated as

    (3/12 x $18,000).

    Dr Rent revenue

    Cr Unearned rent revenue, $4,500

    (3/12 x $18,000)
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Home » Business » XYZ Company received $18,000 on April 1, 2020 for one year's rent in advance and recorded the transaction with a credit to a nominal account. The December 31, 2020 adjusting entry is
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