Hilton Head Realty Company received a check for $60,000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent was credited for the full $60,000. Financial statements will be prepared on July 31.
Hilton Head Realty should make the following adjusting entry on July 31:

Question

Quizplus · Accepted Answer

$60,000 x 1/6 = $10,000 = Rent Revenue in current year.
Original entry:
Cash $60,000
$\quad $ $\quad $ $\quad $ Unearned Rent $60,000
(to record receipt of advance rent payment)
Year-end entry:
Unearned Rent $10,000
$\quad $ $\quad $ $\quad $ Rental Revenue $10,000
(to record rental income earned during year)

Hilton Head Realty Company Received a Check for $60,000 on July