Homework Answers
Answer: The expired portion till December 31, 2020 is treated as an expenses and remaining will be treated as prepaid expense.
Prepaid rent of an office building = $53520*(24-17)/24 = $15610
Prepaid rent of a warehouse = $34800*(24-10)/24 = $20300
Total Prepaid Rent = $15610 + $20300 = $35910.
Hence the answer is Option b.
Note: Years are converted into months for the purpose of calculation.
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#5.
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#5.
The unearned rent account arose through the pre-payment of rent by
a tenant in the building for a 12 month period beginning August 1,
2020
REQUIRED: prepare the annual year and adjusting journal
entries indicated by the data above
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