Problem $7\mathrm{.}27$

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LO $7-3$

Unearned revenues$-$rent $($Note: See $\frac{\sqrt[\phantom{2}]{\frac{?}{?}}}{?}$ Exercise $5\mathrm{.}22$ for the related prepaid expense accounting.$)$ On November $1,2022,$

Gordon Co$.$ collected $$31,800$ in cash from its tenant as an advance rent payment on its store location. The six$-$month lease

period ends on April $30,2023,$ at which time the contract may be renewed.

Required:

a$.$ Use the horizontal model $($or write the journal entries$)$ to record the effects of the following items for Gordon Co$.$:

The six months of rent collected in advance on November $1,2022.$

The adjustment that will be made at the end of each month to show the amount of rent "earned" during the month.

b$.$ Calculate the amount of unearned rent that should be shown on the December $31,2022,$ balance sheet with respect to

this lease.

c$.$ Suppose the advance collection received on November $1,2022,$ covered an $18-$month lease period at the same amount of

rent per month. How should Gordon Co$.$ report the unearned rent amount on its December $31,2022,$ balance sheet?