true
true
Yes, unearned rent is an example of a deferral. It represents rental payments received in advance for services not yet performed, meaning the revenue is not recognized until the rental period occurs. This deferred revenue is recorded as a liability on the balance sheet until the service is rendered.
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
Yes, deferred rent revenue is considered a liability. It represents rent payments received in advance for which the service has not yet been provided, indicating an obligation to deliver the rental space in the future. As the rental period progresses and the service is rendered, the deferred revenue is recognized as earned revenue on the income statement.
unearned rent
true
Yes, unearned rent is an example of a deferral. It represents rental payments received in advance for services not yet performed, meaning the revenue is not recognized until the rental period occurs. This deferred revenue is recorded as a liability on the balance sheet until the service is rendered.
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
Debit
Yes, deferred rent revenue is considered a liability. It represents rent payments received in advance for which the service has not yet been provided, indicating an obligation to deliver the rental space in the future. As the rental period progresses and the service is rendered, the deferred revenue is recognized as earned revenue on the income statement.
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.
If it has been prepaid by a customer and you show the cash related to this prepayment on your books, it is straight liability. You can think of this as something that you have but does not belong to you until you earn it. It is not deferred liability.
debit cash or a/r and credit unearned rent revenue
Yes, unearned rent is considered a liability rather than an asset. It represents rent payments received in advance for which the service has not yet been provided, indicating an obligation to deliver future rental services. As the rental period progresses and the service is rendered, the unearned rent is recognized as revenue, reducing the liability.
land rent is an unearned income
Unearned rent is not considered an asset; rather, it is a liability. It represents rent payments received in advance for which the service (i.e., providing rental space) has not yet been delivered. Once the rental period occurs and the service is rendered, the liability is reduced, and it is recognized as revenue. Thus, unearned rent reflects an obligation to provide future services rather than a resource owned by the entity.