On September 1, 20A, Maria Theresa C Apostol, owner of Cateel Fitness Centre paid an advance rental on a space of the building it occupies in the amount of P84,000. This covers the period from September 1, 20A to September 1, 20B and the accounting period ends on December 31, 20A. Q-1 If Asset Method or Real Approach is used in recording the prepayment, what is your journal entry on September 1, 20A? Q-2. If Expense Method or Nominal Approach is used in recording the prepayment, what is your journal entry on September 1, 20A? Q-3. How much of the P84,000 advanced rental payment will expire or will be expensed at the end of each month?
On September 1, 20A, Maria Theresa C Apostol, owner of Cateel Fitness Centre paid an advance rental on a space of the building it occupies in the amount of P84,000. This covers the period from September 1, 20A to September 1, 20B and the accounting period ends on December 31, 20A. Q-1 If Asset Method or Real Approach is used in recording the prepayment, what is your journal entry on September 1, 20A? Q-2. If Expense Method or Nominal Approach is used in recording the prepayment, what is your journal entry on September 1, 20A? Q-3. How much of the P84,000 advanced rental payment will expire or will be expensed at the end of each month?
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 29P
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