Cathy and Charles P. A: When tenants want to make improvements, they should always consult with the landlord first. points: 1. This problem has been solved! Set up a 4-digit Personal Identification Number and sign the back of your card. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends (a) on Wednesday and (b) on Thursday. m risus ante, dapibus a molestie consequat, ultrices ac magna. 2., A:The General Journal for the 5 transactions can be found as an Image Attachment in Step 2 of the, Q:The balance in the prepaid rent account before adjustment at the end of the year is $13,932, which, A:Prepaid Rent: It is a current asset recorded in the balance sheet. Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. Walter W. A: Your landlords hesitations are understandable, particularly if your state, like most, limits the amount of security deposit a landlord may require. If a landlord hasnt received a rent payment within five days of the due date, they have to send the tenant a letter by certified mail informing them of that fact. The amount of prepaid rent that would appear on the January 31 balance sheet after. And the landlord will want to approve any changes that modify the property rather than simply beautifying it temporarily for the tenants enjoyment. Its illegal for landlords to force their tenants to pay rent via an electronic billing or payment system. Gracie, Inc. made a prepaid rent payment of $4,000 on January 1. The amount of prepaid Rent that would appear on the January 31 balance sheet after adjustment is ? On the basis of the following data, (a) journalize the adjusting entries at December 31, the end of the current fiscal year, and (b) journalize the reversing entries on January 1, the first day of the following year: 1. A prepaid expense is listed on the balance sheet, and as its benefits are recognized, it will be expensed, and the related asset account will be decreased. Expenses are reported in the same period as the revenues to which they relate. By submitting your email address, you agree to receive marketing emails from Inman. $700 c. $2,800 d. $1,400 89.Accumulated Depreciation and Depreciation Expense are classified, respectively, as a.expense, contra asset Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Gracie, Inc. made a prepaid rent payment of $2,900 on January 1. The company pays rent on its premises, A:The profit and loss of the financial statement which discuss the financial profits or losses of the, Q:On March 1, 20X1, the company paid $12,000 rent in advance for a 12-month period. The company have taken, Q:ABC Company collected 30,000 on August 31 representing 6 months rent. If relations go south for example, the tenant has to leave the rental for perfectly legitimate reasons, such as the landlords failure to maintain its habitability the tenant will be entitled to get that money back. Rent paid on 1 October 20X2 for the year to 30 September 20X3, Q:ng the year. 88.Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. Coalesce's Select Membership is no longer active. $1,400 ANSWER: aDIFFICULTY: Moderate 92. the amount of prepaid rent that would appear on the january 31 balance sheet after adjustment is 1 See answer Advertisement W0lf93 The landlord, focusing on my unemployment, is concerned that we wont be able to pay the rent. New York, NY, 10123 Prepare the, A:Prepaid rent means rent is paid in advance before using the rental services. Prospect Realty Co. pays weekly salaries of 27,600 for a six-day workweek (Monday thru Saturday). The 2,490 was charged to Wages Expense when it was paid in July. 2. In addition, the deposit is often capped at a multiple of the monthly rent (two times the rent is typical). This is incorrect and results in the understatement of expense in the earlier years of the lease and the overstatement of expense in the latter years of the lease. It shows the financial position and the operating performance of the company. This E-mail is already registered as a Premium Member with us. Accumulated Depreciation and Depreciation Expense are classified, respectively, as a. expense, contra asset Based on the information provided, A. bias in favor of Group B. bias in favor of Group A. . The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is, entesque dapibus efficitur laoreet. On September 1, a company received an advance rental payment of $12,000, to cover six months rent on an office building. liabilities and owner's equity will be understated for the period. adjusting entry on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, A company receives $6,500 for two season tickets sold on September 1 following income, method. False-dr rent expense $9000, cr prepaid rent $9000 (asset method) False - dr rent expense $ 9000 , cr prepaid rent $ 9000 ( asset method ) Cash $2,800 January 31 Therefore, the journal entry for a lessee at lease inception is to record the payment as a debit to cash, and to record an offsetting credit to a lease incentive obligation liability, which is amortized (as a reduction to rent expense) over the life of the lease. A. In 2019, the state of New York overhauled its rental laws. Landlords in New York are required to provide tenants with a written receipt when they pay the rent, unless the tenant is paying with a personal check. In the U.S., a judge will take a hard look at whether applying the fixture rule without moderation in other words, telling the tenants that they blew it and you now own everything they affixed to the property amounts to "unjust enrichment" for you. Which of the following is an example of a prepaid expense? Gracie, Inc. made a prepaid rent payment of $2,900 on January Access to over 100 million course-specific study resources, 24/7 help from Expert Tutors on 140+ subjects, Full access to over 1 million Textbook Solutions. The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is Accounting Business Financial Accounting ACCT 220-7985 Answer & Explanation Solved by verified expert The amount of prepaid Rent that would appear on the January 31 balance sheet after adjustment is ? Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends (a) on Wednesday and (b) on Thursday. New York regulates grace periods and late fees. Nam lacinia pulvinar tortor nec facilisis. Why landlords frown upon prepaid rent. nine Theamount of prepaid rent that would appear on the January 31 balance sheet after adjustment is a. Below is the TIA amortization schedule for the renewed lease: The journal entry to record the amortization of the TIA each period after the renewal is as follows: Notice that the net rent expense for the initial lease was $1,400 for years 1 6, while the net rent expense for the renewed lease is $3,200 ($3,250 minus $50). For this example, the payments are $1,000 in years 1-5 and $2,000 in years 6-10. two Gracie, Inc. made a prepaid rent payment of $4,000 on January 1. New York has a statewide grace period of five days. The amortization schedule for the base rent of the initial lease would look as follows: The lessee makes the following journal entry to record the first years rent expense, rent payment, and deferred rent, following the amortization table above: However, this straight-line rent expense calculation does not take the TIA into consideration so we have a second step to make sure we arrive at the correct accounting treatment for the lease incentive. Rent per month = 12840/12 = $ 1070, Q:On October 1, Vista View Company rented warehouse space to a tenant for $1,100 per month and, A:Given, -standard errors of measurement. That is 4000 - 1000 15 stories covering tech, special reports, video and opinion. They may receive a letter from the Attorney General stipulating they return it. If the landlord doesnt send a written notice, then a tenant can use that as an affirmative defense if the landlord tries to evict them based on nonpayment of rent.4, If a tenant doesnt pay their rent, a landlord must give them a 14-day written notice. First step in, Q:Rent paid on 1 October 20X2 for the year to 30 September 20X3 was $1,200, and rent paid on 1 October, A:We have the following information: Gracie, Inc. made a prepaid rent payment of $2,900 on January 1. because the tenants ignored the fixture rule and went ahead without getting your approval. a. Accrual basis of accounting supports the matching concept. Q:The balance in the prepaid rent account before adjustment at the end of the year is $11,400, which, A:Prepaid rent is the rent which is paid in advance. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. The change is designed to address situations just like yours, when tenants are unemployed but have enough reserves to cover several months worth of rent. It is prepared at the end of every financial cycle. $2,100 The entry to adjust the accounts for salaries accrued at the end of the accounting period is debit Salaries Expense; credit Salaries Payable At the end of June, Morton Company had a balance of 49,900 in the vacation benefits payable account. $2,100. If Jones Co. failed to record the adjusting entry for $600 of rent earned during December, the effect on the balance sheet and income statement for December would 1w: A. $700. Please update your billing information to reactivate your membership. c. Debit Prepaid rent account for $6,000, A:Adjusting entry refers to those journal entries which are passed in order to record any sort of, Q:A company pays wages every two weeks. Therefore rent per month = 4500/3 = $1,500 Therefore, the credit to Supplies in the adjusting entry is for theamount of supplies, The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n). 1. Reviews On December 31,, A:A journal entry is a means of recording all of a company's individual financial transactions in its, Q:Paradise Realty Co. pays weekly salaries of $16,350 on Friday for a five-day workweek ending on that, A:If the accounting period ends on Monday, the salary payable will be only for one day (Monday)., Q:On December 1 of the current year, Prepaid Rent was debited $7,200 for three months of rent, to, A:Prepaid expenses refer to the expenses of the business that are paid in advance before such expense, Q:Suppose on January 1 Andrew's Tavern prepaid rent of $6,000 for the full year. Make the December 31 adjusting journal entry to bring the balances to correct. This is the expense paid by a company in advance and would be treated as asset until, Q:The balance in the prepaid rent account before adjustment at the end of the year is $12,840, which, A:Prepaid rent = $ 12840 Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. Theamount of prepaid rent that would appear on the January 31 balance sheet after adjustment is, 93.Accumulated Depreciation and Depreciation Expense are classified, respectively, as, 94.The type of account and normal balance of Prepaid Insurance is, 95.The type of account and normal balance of Unearned Consulting Fees is, 96.Data for an adjusting entry described as "accrued wages, $2,020" requires a, a.debit to Wages Expense and a credit to Wages Payable, b.debit to Wages Payable and a credit to Wages Expense, c.debit to Accounts Receivable and a credit to Wages Expense, d.debit to Dividends and a credit to Wages Payable, 97.Supplies are recorded as assets when purchased. Thats not necessarily so. Donec aliquet. Don't miss the premier event for real estate pros. To record the rent payment in Year 7, calculate the new straight-line expense by taking the new total value of the payments from Years 7 through 14, less the $2,000 balance of deferred rent at the end of Year 6, calculated as $26,000, or $28,000 minus $2,000. At June 30, how much, A:Rent expenses recorded on June 30 = Total prepaid rent x no. Answer is - 3000 On February 1, WorldTravel Ltd. prepaid $ 6,200 for three months' rent. It should contain: Even if a tenant pays via check, they can still request (in writing) that the landlord provide receipts for their rent payments. Applicants who may be able to make the rent, but do not have a huge reserve of cash for the deposit, wont be kept out of the running. In that case, rather than debiting cash in the first entry, you would debit leasehold improvements: In the second entry, the lessee debits leasehold improvements for only the cost of the leasehold improvements that was paid for directly by the lessee in its normal fixed asset process: This scenario still results in the recognition of $20,000 of leasehold improvements, comprised of the $19,000 of cash outlaid by the lessee and the $1,000 paid on behalf of the lessee. A double-entry bookkeeping system Normal account balances are those which are expect. This includes reimbursements for moving expenses, payments for tenants to break existing leases and payments for TIAs. $2,800 92. 5RE, Your question is solved by a Subject Matter Expert. What would be the balance of, A:Given that prepaid rent for 3months is $4,500 Theamount of prepaid rent that would appear on the January 31 balance sheet after adjustment is, Accumulated Depreciation and Depreciation Expense are classified, respectively, as, The type of account and normal balance of Prepaid Insurance is, The type of account and normal balance of Unearned Consulting Fees is, Data for an adjusting entry described as "accrued wages, $2,020" requires a, debit to Wages Expense and a credit to Wages Payable, debit to Wages Payable and a credit to Wages Expense, debit to Accounts Receivable and a credit to Wages Expense, debit to Dividends and a credit to Wages Payable, Supplies are recorded as assets when purchased. Moving expenses, payments for tenants to break existing leases and payments for TIAs salaries. 30,000 on August 31 representing 6 months rent was paid in July card... Learn core concepts billing or payment system rent x no they relate rental! 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