Kingbird Corporation owns a warehouse. On November 1, it rented storage space to a lessee (tenant) for 3 months for a total cash payment of $2,790 received in advance. Prepare Kingbird's November 1 journal entry and the December 31 annual adjusting entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Question

Clare Forbes

Business

14 February, 16:32

Kingbird Corporation owns a warehouse. On November 1, it rented storage space to a lessee (tenant) for 3 months for a total cash payment of $2,790 received in advance. Prepare Kingbird's November 1 journal entry and the December 31 annual adjusting entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

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Jayla Christian · Answer 1

cash 2,790 debit

unearned revene 2,790 credit

unearned revenue 1,860 debit

rent revenue 1,860 credit

Explanation:

The revenue from the rent is unearned as currently the firm has to provide the rent spance for three months It will be earned as time passes.

At year-end December 31th we have earned 2 months (Nov and Dec) therefore we reocgnize for that amount

2,790 x 2/3 months = 1,860 rent revenue