Question: 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

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.)

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.)

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WorksheetDifficulty: 3 HardLearning Objective: 07-03 Discuss what unearned revenues are and how they are presented in the balance sheet.

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value: 1.50 points

Required information

a-3. Record the journal entry to show the effect of the six months of rent collected in advance on November 1, 2016 for Gordon Co. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a-4. Record the journal entry to show 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

References

eBook & Resources

WorksheetDifficulty: 3 HardLearning Objective: 07-03 Discuss what unearned revenues are and how they are presented in the balance sheet.

Check my work

value: 1.50 points

Required information

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

References

eBook & Resources

WorksheetDifficulty: 3 HardLearning Objective: 07-03 Discuss what unearned revenues are and how they are presented in the balance sheet.

Check my work

value: 1.50 points

Required information

c. Suppose the advance collection received on November 1, 2016, covered an 30-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?

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