Mannion Property Management leases commercial properties and expects its clients to pay rent on a monthly basis. A new client signs a 4-year lease with a yearly rent of $420,000 and agrees to pay the first 6 months in advance.
Required:
Make the journal entry to record the following transactions.
1. The customer's prepayment of 6 months' rent
2. The necessary adjusting entry after 1 month has passed