A company owes rent at a rate of $6,000 per month.The company pays the rent owed on the tenth of each month for the previous month.At the end of each month,what kind of adjustment is required?

Question

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Accrual adjustments are needed when a company has earned revenue or incurred an expense in the current period but has not yet received or paid the related cash.The related cash will not be received or paid until a later period.In this case,at the end of each month,rent expense has been incurred but is not paid until the tenth of the following month.

A Company Owes Rent at a Rate of $6,000 Per