Question

A sale transaction on rental property closes on December 10th. The landlord received the December rent of $4,400 on December 1. Assuming the closing day is the seller's, and that the 360-day method is used for prorating, how much will the seller owe the buyer?

Answer 1

Answer:

$2,933.40

Explanation:

For computing the owed amount, first we have to compute the daily rate per day which is shown below:

= Rent received ÷ number of days in a month

= $4,400 ÷ 30 days

= 146.67 per day

We know that the number of days in a month is 30 days and the landlord received a rent on December 10, so the remaining days would be 20 days ( 30 days - 10 days of march month)

Now the owed amount would be

= Remaining days × per day rate

= 20 days × 146.67

= $2,933.40