Apex Properties, Inc. owns two warehouse buildings that it rents to other businesses. The two buildings are very desirable properties and this enables Apex to require that renters pay rent in advance. The following is data for each building: Building #1 - Located at 111 Warehouse Way Rental rate $3,000 per month Number of months of rent collected in advance 3 months Dates when rent is collected in advance January 1, April 1, July 1, October 1 Building #2 – Located at 444 Storage Street Rental rate $4,000 per month Number of months of rent collected in advance .... 3 months Dates when rent is collected in advance January 1, April 1, July 1, October 1 Apex has the accounting policy that rent collected in advance be initially recorded in a liability account. The balance in the Unearned Rent Revenue account as of December 31, 2020 was $0. On January 1, 2021, Apex collected cash for the 3 month advance payment of rent for both buildings. The cash collected is detailed below: Building #1 - for Jan., Feb. & March-3 months cash collected.... (3 x $3,000) $ 9,000 ..... Building #2 - for Jan., Feb. & March -3 months cash collected.... (3 x $4,000) $12,000 ..... Total cash collected on January 1, 2021 $21,000 The following is a partial list of the accounts in Apex's General Ledger. These are the only accounts you need for this problem. D Cash D Unearned Rent Revenue (liability account) D Rent Revenue (revenue account)
Apex Properties, Inc. owns two warehouse buildings that it rents to other businesses. The two buildings are very desirable properties and this enables Apex to require that renters pay rent in advance. The following is data for each building: Building #1 - Located at 111 Warehouse Way Rental rate $3,000 per month Number of months of rent collected in advance 3 months Dates when rent is collected in advance January 1, April 1, July 1, October 1 Building #2 – Located at 444 Storage Street Rental rate $4,000 per month Number of months of rent collected in advance .... 3 months Dates when rent is collected in advance January 1, April 1, July 1, October 1 Apex has the accounting policy that rent collected in advance be initially recorded in a liability account. The balance in the Unearned Rent Revenue account as of December 31, 2020 was $0. On January 1, 2021, Apex collected cash for the 3 month advance payment of rent for both buildings. The cash collected is detailed below: Building #1 - for Jan., Feb. & March-3 months cash collected.... (3 x $3,000) $ 9,000 ..... Building #2 - for Jan., Feb. & March -3 months cash collected.... (3 x $4,000) $12,000 ..... Total cash collected on January 1, 2021 $21,000 The following is a partial list of the accounts in Apex's General Ledger. These are the only accounts you need for this problem. D Cash D Unearned Rent Revenue (liability account) D Rent Revenue (revenue account)
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter21: Accounting For Accruals, Deferrals, And Reversing Entries
Section: Chapter Questions
Problem 2AP
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Transcribed Image Text:Apex Properties, Inc. owns two warehouse buildings that it rents to other businesses. The two
buildings are very desirable properties and this enables Apex to require that renters pay rent in
advance. The following is data for each building:
Building #1 - Located at 111 Warehouse Way
Rental rate
$3,000 per month
Number of months of rent collected in advance
3 months
Dates when rent is collected in advance
January 1, April 1, July 1, October 1
Building #2 - Located at 444 Storage Street
Rental rate
$4,000 per month
Number of months of rent collected in advance
3 months
Dates when rent is collected in advance
January 1, April 1, July 1, October 1
Apex has the accounting policy that rent collected in advance be initially recorded in a liability
account.
The balance in the Unearned Rent Revenue account as of December 31, 2020 was $0.
On January 1, 2021, Apex collected cash for the 3 month advance payment of rent for both
buildings. The cash collected is detailed below:
Building #1 – for Jan.., Feb. & March - 3 months cash collected... (3 x $3,000)
$ 9,000
.....
$12,000
Building #2 – for Jan., Feb. & March - 3 months cash collected.... (3 x $4,000)
Total cash collected on January 1, 2021
$21,000
The following is a partial list of the accounts in Apex's General Ledger. These are the only
accounts you need for this problem.
D Cash
D Unearned Rent Revenue (liability account)
D Rent Revenue (revenue account)
Transcribed Image Text:equirement 1 -- January 1 receive $21,000 adv
Debit
Credit
Date
Account Name
Requirement 2 -- "T" Account Analysis for the January 31 adjusting entry
"T" Account Analysis for Asset and Liability Accounts
Account Name →
Unearned Rent Revenue
Debit
Credit
(1) What is the current balance?
(3) What adjustment is required to
adjust from the current balance
to the should be balance?
|(2) What should be the balance?
14,000
Bldg #1 $6,000 (Feb. & March) + Bldg #2 $8,000 (Feb. & March) = $14,000
equirement 3 -- January 31 Unearned Rent Revenue adjusting entry
Date
Account Name
Debit
Credit
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