Baden Realty Company received a check for: P18,000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Uncarned Rent was credited for the full P18,000. Financial statements will be prepared on July 31. Baden Realty should make the following adjusting entry on July 31: * Debit Unearned Rent, P3,000; Credit Rental Revenue, P3,000. Debit Rental Revenue, P3,000; Credit Unearned Rent, P3,000. Debit Unearned Rent, P18,000; Credit Rental Revenue, P18,000. Debit Cash, P18,000; Credit Rental Revenue, P18,000.

Baden Realty Company received a check for: P18,000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Uncarned Rent was credited for the full P18,000. Financial statements will be prepared on July 31. Baden Realty should make the following adjusting entry on July 31: * Debit Unearned Rent, P3,000; Credit Rental Revenue, P3,000. Debit Rental Revenue, P3,000; Credit Unearned Rent, P3,000. Debit Unearned Rent, P18,000; Credit Rental Revenue, P18,000. Debit Cash, P18,000; Credit Rental Revenue, P18,000.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 8RE: At the end of 2019, Framber Company received 8,000 as a prepayment for renting a building to a...

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At the end of 2019, Framber Company received 8,000 as a prepayment for renting a building to a tenant during 2020. The company erroneously recorded the transaction by debiting Cash and crediting Rent Revenue in 2019 instead of 2020. Upon discovery of this error in 2020, what correcting journal entry will Framber make? Ignore income taxes.