Maya does not occupy all of the space in the building it owns; it leases the exc
ID: 2364465 • Letter: M
Question
Maya does not occupy all of the space in the building it owns; it leases the excess space to other companies. On October 1, 2012, Maya received a check in the amount of $12,800 from one of its tenants. That tenant signed a lease for eight months beginning on that date. The check represented the full amount of the rent for the eight month period.
(b)Maya does not occupy all of the space in the building it owns; it leases the excess space to other companies. On October 1, 2012, Maya received a check in the amount of $12,800 from one of its tenants. That tenant signed a lease for eight months beginning on that date. The check represented the full amount of the rent for the eight month period.
Explanation / Answer
I do not know the date for which you need an adjusting entry, so let's look at the most obvious dates: Receipt of check: dr Cash 18,400 cr Unearned Rent 18,400 - Record receipt of rent in advance - Adjusting entry at October 31 (if adjusting entry is for one month): dr Unearned Rent 2,300 cr Rent Revenue 2,300 - Record one month of revenue earned (1/8 * 18,400) - OR: Adjusting entry at December 31 (if for year-end): dr Unearned Rent 6,900 cr Rent Revenue 6,900 - Record three months of revenue earned (3/8 * 18,400) - Source(s): College Accounting Instructor and CPA