Landmark Properties owns and operates an apartment building and prepares annual financial statements based on a March 31 fiscal year-end.
Required
Journalize the adjusting entry for each of (a) and (b) and the subsequent entry required in (c).
a. The tenants of one of the apartments paid five months' rent in advance on November 1, 2013. The monthly rental is $2,200 per month. The journal entry credited the Unearned Rent account when the payment was received. No other entry had been recorded prior to March 31, 2014. Give the adjusting journal entry that should be recorded on March 31, 2014.
b. On January 1, 2014, the tenants of another apartment moved in and paid the first month's rent. The $2,650 payment was recorded with a credit to the Rent Earned account. However, the tenants have not paid the rent for February or March. They have agreed to pay it as soon as possible. Give the adjusting journal entry that should be recorded on March 31, 2014.
c. On April 22, 2014, the tenants described in (b) paid $7,950 rent for February, March, and April, Give the journal entry to record the cash collection.