Question

end of its predicted 25-year life. Annual depreciation is $27,200 e. Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $2,500 per month starting on November 1, 2019. The rent was paid on time on November 1, and the amount received was credited to the Rent Earned account. However, the tenant has not paid the December rent. The company has worked out an agreement with the tenant, who has promised to pay both December and January rent in full on January 15. The tenant has agreed not to fall behind again 1. On November 1, the company rented space to another tenant for $2.265 per month. The tenant paid five months' rent in advance that Thanh

Answer 1

Under accrual system of accounting rent earned is recognised in books of account when its due , irrespective of payment received or not on time . For that we debit Rent receivable account and credit Rent earned account. In the given question tenant has promised to pay December and January month rent on 15th January. So when tenant performed his promised than we pass the entry of cash received against rent receivable account.    

e. JOURNAL ENTRIES Date Particular Nov-01 Cash A/C To Rent Earned A/C ( Being Rent received for the Novemebr Month ) Debit ($) Credit ($) 2500 2500 2500 Dec-01 Rent Receivable A/C To Rent Earned A/C Being December Month rent receivabe) 2500 2500 Jan-01 Rent Receivable A/C To Rent Earned A/C ( Being January Month rent receivable) 2500