Question
Alpha pays rent for numerous offices located throughout the city each year. Alpha pays rents in advance in some cases, and in others, rents are
Alpha pays rent for numerous offices located throughout the city each year. Alpha pays rents in advance in some cases, and in others, rents are paid when due. And sometimes rents arent paid until after they are due, but they are expensed and a payable is recorded at the time they are due. The following information is included in Alphas December 31 balance sheets for 2020 and 2021:
Prepaid Rent 2020: $20,000 2021: $38,000
Rent Payable 2020: $17,000 2021: $27,000
During 2021, Alpha paid total cash of $250,000 for rent. In its income statement for the year ended December 31, 2021, how much rent expense should Alpha report on an accrual basis?
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