Question

Sanborn company rents space to a tenant for $3,100 per month. the tenant currently owes rent for november and december. the tenant has agreed to pay the november, december, and january rents in full on january 15 and has agreed not to fall behind again. the adjusting entry needed on december 31 is:

Answer 1

Adjusting entry for Rent Receivable:

It is given that Sanborn Company rents space to a tenant for $3,100 per month. The tenant currently owes rent for November and December, it means the Rent Receivable as on Dec. 31 is (3100*2) = $6,200

So the adjusting entry as on Dec. 31 shall be as follows:

Rent Receivable    Debit  $6,200

Rent Revenue        Credit               $6,200

(Being adjustment made for rent receivable)