Swerte Co. received P45,600 on May 1, 2020 for one year’s rent in advance and recorded the transaction with a credit to real account. The December 31,2020 Adjusting entry is Debit - Unearned rent Credit - Rent Revenue for P30,400 Debit -Unearned rent Credit - Rent Revenue for P15,200 Debit -Rent Revenue Credit - Unearned rent for P30,400 Debit -Rent Revenue Credit - Unearned rent for P15,200
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Swerte Co. received P45,600 on May 1, 2020 for one year’s rent in advance and recorded the transaction with a credit to real account. The December 31,2020
Debit - Unearned rent Credit - Rent Revenue for P30,400
Debit -Unearned rent Credit - Rent Revenue for P15,200
Debit -Rent Revenue Credit - Unearned rent for P30,400
Debit -Rent Revenue Credit - Unearned rent for P15,200
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