It has a normal balance of a credit.
The normal balance of Unearned Rent is typically a liability credit entry. The balance will show up in the post-closing trial of the balance sheet.
liability, credit
Yes unearned rent is that amount which is already received but which is not due to be received yet that's why it is shown in liability section of balance sheet and it has credit balance.
so is it accounts rec of 1500 and credit rent revenue of 1500 or is it 2100 unearned rent and rent revenue 2100 I cannot get this straight
As it is still unearned which means we have not yet provide the benefit of which we have received the rent that's why it's the liability of company and it would be shown at liability side of balance sheet.
The normal balance of Unearned Rent is typically a liability credit entry. The balance will show up in the post-closing trial of the balance sheet.
liability, credit
Yes unearned rent is that amount which is already received but which is not due to be received yet that's why it is shown in liability section of balance sheet and it has credit balance.
so is it accounts rec of 1500 and credit rent revenue of 1500 or is it 2100 unearned rent and rent revenue 2100 I cannot get this straight
As it is still unearned which means we have not yet provide the benefit of which we have received the rent that's why it's the liability of company and it would be shown at liability side of balance sheet.
In the current liability section of the balance sheet.
unearned rent
Unearned Rent is rent paid in advance to one company/person from another. Unearned Rent is a liability until it is earned. Unearned rent is "not" closed on an income summary at the end of the fiscal year. Unearned rent is never actually "closed" but actually brought down to a zero balance account.For example, your company was paid rent for December 2010, and January and February 2011 in the amount of say $15,000 and on December 31, 2010 your fiscal year ends and you are closing your books and the December rent paid to you expires (is used up for December) your entry will be a debit to unearned rent for $5,000 and a credit to Rent Revenue for $5,000. This still leaves a balance of $10,000 in unearned rent for the following year (Jan. and Feb.)Let's look at another scenario, say you charge $3,000 a month for rent and your company is paid for the full year (Jan.-Dec.) Your first entry to record such a payment is a debit to cash $36,000 and a credit to unearned rent $36,000As each month expires you remove the amounts in increments of $3,000 until the account balance in unearned rent is zero, then at the end of the accounting period, rent revenue is closed to the income summary, not unearned rent.
Prepaid rent is a rent paid in advance so it is current asset and it will have debit balance as normal balance.
Income received but not yet earned, such as rent received in advance or other advances from customers. Unearned income is usually classified as a current liability on a company's balance sheet, assuming that it will be credited to income within the normal accounting cycle.
debit cash or a/r and credit unearned rent revenue
land rent is an unearned income