Question

ABC Company rents its extra office space to XYZ Company for $600 per month. On November 1, 2020, ABC Company received $3,600 rent in advance from XYZ Company for the months of November 2020, December 2020, January 2021, February 2021, March 2021, and April 2021. The adjusting entry on December 31, 2020 (the end of the fiscal year) would include:

Answer 1

Debit : Rent Paid in Advance $1,200

Credit : Rent Income $1,200

Step-by-step explanation:

The adjusting entry on December 31, 2020 would include:

Debit : Rent Paid in Advance $1,200

Credit : Rent Income $1,200