Rent was paid in advance ( video below)

A company has sublet part of its offices and in the year ended 30 November 20X5 the rent receivable was:

Until 30 June 20X5   $2,100 per year

From 1 July 20X5   $3,000 per year

Rent was paid quarterly in advance on 1 January, April, July, and October each year.

What amounts should appear in the company’s financial statements for the year ended 30 November 20X5?

Answer

$

Statement of profit or loss

December to June 2,100 x 7/12       1,225

July to November 3,000 x 5/12        1,250 

Rent receivable                                  2,475

Statement of financial position

Sundry payables 3,000 x 1/12 =$250 (December rent received in advance)

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