Question

The following two events occurred for Trey Co. on October 31, the end of its fiscal year.

1. Trey rents a building from its owner for $3,700 per month. By a prearrangement, the company delayed paying October's rent until November 5. On this date, the company paid the rent for both October and November.
2. Trey rents space in a building it owns to a tenant for $1,350 per month. By prearrangement, the tenant delayed paying the October rent until November 8. On this date, the tenant paid the rent for both October and November.

  
Required:
1. Prepare adjusting entries that the company must record for these events as of October 31.
2. Assuming Trey does not use reversing entries, prepare journal entries to record Trey’s payment of rent on November 5 and the collection of the tenant’s rent on November 8.
3. Assuming that the company uses reversing entries, prepare reversing entries on November 1 and the journal entries to record Trey’s payment of rent on November 5 and the collection of the tenant’s rent on November 8.

Complete this question by entering your answers in the tabs below.

• Required 1-Prepare adjusting entries that the company must record for these events as of October 31.
• Required 2- Assuming Trey does not use reversing entries, prepare journal entries to record Trey’s payment of rent on November 5 and the collection of the tenant’s rent on November 8.
• Required 3- Assuming that the company uses reversing entries, prepare reversing entries on November 1 and the journal entries to record Trey’s payment of rent on November 5 and the collection of the tenant’s rent on November 8.

Prepare adjusting entries that the company must record for these events as of October 31.

Journal entry worksheet

Note: Enter debits before credits.

	Date General Journal Debit Credit Oct 31

Answer 1

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Part 1
Date	Account	Debit	Credit
Oct 31	Rent Expense	$    3,700
	Rent Payable (Accounts Payable)		$    3,700
	(To record rent expense accrued)
Oct 31	Rent Receivable	$    1,350
	Rent Revenue		$    1,350
	(To record rent revenue accrued)
Part 2
Date	Account	Debit	Credit
Nov 5	Rent Payable	$    3,700
	Rent Expense	$    3,700
	Cash		$    7,400
	(To record rent for Oct and Nov)
Nov 8	Cash	$    2,700
	Rent Receivable		$    1,350
	Rent revenue		$    1,350
	(To record rent for Oct and Nov)
Part 3
Date	Account	Debit	Credit
Nov 1	Rent Payable	$    3,700
	Rent Expense		$    3,700
	(To record reversal entry)
Nov 1	Rent Revenue	$    1,350
	Rent Receivable		$    3,700
	(To record reversal entry)
Nov 5	Rent Expense	$    7,400
	Cash		$    7,400
	(To record rent for Oct and Nov)
Nov 8	Cash	$    2,700
	Rent Revenue		$    2,700
	(To record rent for Oct and Nov)