Question

On January 1, 2016, Flathound Properties received $22,800 from a tenant as rent for all of 2016. What journal entry would Flathound Properties make at the end of January 2016 to show that one month of service had been provided?

Answer 1

In order to show that one month of service has been provided, Flathound Properties should both Debit Deferred Revenue and Credit Revenue for $1,900.

What is the journal entry for a month of service?

The $22,800 is for the whole year so we need to find the monthly rent:

= 22,800 / 12

= $1,900

This amount will be credited to Revenue to show that Flathound Properties has earned it for rental services provided. It will also be debited to Deferred Revenue.

Find out more on Deferred Revenue at https://brainly.com/question/14834977.

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