On November 1, 2016, Gordon Co. collected $75,600 in cash from its tenant as an advance rent payment on its store location. The six-month lease period ends on April 30, 2017, at which time the contract may be renewed.

Required:

a-1. Use the horizontal model to record the effect of the six months of rent collected in advance on November 1, 2016 for Gordon Co. (Use amounts with + for increases and amounts with for decreases.) Fill in yellow boxes

a-2. Use the horizontal model to record the effect of the adjustment that will be made at the end of each month to show the amount of rent "earned" during the month for Gordon Co. (Use amounts with + for increases and amounts with for decreases.) Fill in yellow boxes

b. Calculate the amount of unearned rent that should be shown on the December 31, 2016, balance sheet with respect to this lease.

c. If a larger advance collection was received on November 1, 2016, that had covered a longer 18-month lease period (at the same amount of rent per month), how should Gordon Co. report the unearned rent amount on its December 31, 2016, balance sheet?

Assets Balance Sheet Liabilities Stockholders' Equity Net Income