The unused basement space of Magadjust Tayo Store is rented to Compute Kamuna Shop for P2,500 per month, payable monthly. On December 31, 200B, the rent for November and December was neither collected nor recorded. Collection is expected on January 10, 200C. What is the necessary adjusting entry on December 31, 200B for Magadjust Tayo Store? Options: • DEBIT: Rent receivable, P5,000; CREDIT: Cash, P5,000 • DEBIT: Unearned rent, P5,000; CREDIT: Rent revenue, P5,000 • DEBIT: Rent receivable, P5,000; CREDIT: Rent revenue, P5,000 • DEBIT: Rent revenue, P5,000; CREDIT: Unearned rent, P5,000 • DEBIT: Cash, P5,000; CREDIT: Rent revenue, P5,000
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
The unused basement space of Magadjust Tayo Store is rented to Compute Kamuna Shop for P2,500 per month, payable monthly. On December 31, 200B, the rent for November and December was neither collected nor recorded. Collection is expected on January 10, 200C. What is the necessary
Options:
• DEBIT: Rent receivable, P5,000; CREDIT: Cash, P5,000
• DEBIT: Unearned rent, P5,000; CREDIT: Rent revenue, P5,000
• DEBIT: Rent receivable, P5,000; CREDIT: Rent revenue, P5,000
• DEBIT: Rent revenue, P5,000; CREDIT: Unearned rent, P5,000
• DEBIT: Cash, P5,000; CREDIT: Rent revenue, P5,000
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