Under the old lease accounting rules, the cash payments for operating leases were recorded as rent expense in the period incurred and no impact to the balance sheet was recognized. This results in a problem with prepaid expenses for the entities following the accrual system of accounting. Therefore, businesses must record the rent paid in […]

On the other hand, the Right-of-use (ROU) asset amortization is the difference between the payment and the interest component, which is $33,469 ($36,721 payment – $3,251 “Interest”). In the realm of digital assets and blockchain technology, the terms « tokenization » and « NFT » (Non-Fungible Token) are often bandied about, sometimes interchangeably, but they refer to distinct… Let […]

We record this as an increase to the asset account Accounts Receivable and an increase to service revenue. During the month of February, Metro Corporation earned a total of $50,000 in revenue from clients who paid cash. Deferred rent is a liability account representing the difference between the cash paid for rent expense in a […]

We have a growing range of accounting tutorials on the site; please let us know what you think. Prepaid expenses are payments made in advance for goods or services that will be received or used in the future. This is the more common payment arrangement, where tenants deliver their rent at the end of each […]

With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions. LO 3.5Prepare journal entries to record the following transactions. LO 3.5Journalize each of the following transactions or state no entry required and explain why. Be sure to follow proper journal writing rules. LO 3.5State whether the balance […]