Question

Rent Receivable Hudson Corp. has extra space in its warehouse and agrees to rent it out to Stillwater Company at the rate of $2,000 per month. The space was made available to Stillwater beginning on September 1. Under the terms of the agreement, still water pays the month's rent on the fifth day after the end of the month. Assume that Hudson prepares adjustments at the end of each month. Required: 1. How much revenue should Hudson record in September? How much revenue should Hudson record in October? 2. Identify and analyze the transaction on Hudson's books during the month of October. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on financial statement item is negative, Le, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Stateme Stockholders Assets Liabilities Equity Revenues

Answer 1

Solution:

Rent Receivable Hudson Corp 1. Rent revenue in September Rent revenue in October $2000 $2000 2. Indentify and analyse transaction Activity Accounts Operating Rent Receivable, Increase Rent Receivable, Decrease Rent Revenue, Increase Cash, Increase Balance Sheet Income Statement Statements

Balance Sheet Equity 2000 Assets Cash Rent Receivable Rent Receivable Liabilities 2000 No Entry -2000 No Entry 2000 No Entry Income Statement Revenues Rent Revenue Expenses 2000 No Entry Income 2000

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