Seatech Company rents office space to another business for $2,900 per month. On

Question

Seatech Company rents office space to another business for $2,900 per month. On October 20, 2016, Seatech Company received $17,400 from a new tenant for 6 months rent starting November 1, 2016. Seatech Company recorded the total amount in unearned rent revenue. A) What entry did Seatech Company make on October 20, 2016? Dr Cash 17400 Cr Unearned Rent Revenue 7400 B) If Seatech Company does not make any adjustments until December 31, what adjusting entry must be made at 12/31/16? Dr Unearned Rent Revenue+ 5800 Cr Rent Revenue 5800 C) How much revenue will be recognized in 2016? D) How much revenue will be recognized in 2017?

Explanation / Answer

01-Nov Cash 17400         Unearned revenue 17400 31-Dec Unearned revenue 5800            Rent revenue 5800 c Revenue recognized in 2016 5800 (2900*2) d Revenue recognized in 2017 11600 (2900*4)

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