Tracey Realty Company received a check for $180,000 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 $180,000. Financial statements will be prepared on July 31.
Tracey Realty should make the following adjusting entry on July 31:

Question

Quizplus · Accepted Answer

$180,000 x 1/6 = $30,000 = Rent Revenue in current year.
Original Entry:
Cash $180,000
$\quad $ $\quad $ $\quad $ Unearned Rent $180,000
(to record receipt of advance rent payment)
Year-end entry:
Unearned Rent $30,000
$\quad $ $\quad $ $\quad $ Rental Revenue $30,000
(to record rental income earned during year)

Tracey Realty Company Received a Check for $180,000 on July