This is for an accounting course doing adjusting entries..
The rental revenue represents the amount received for 11 months for dining facilities. The December rent has not yet been received.
On the trial balance the amount for rental revenue is 17,600
Would I divide that by 11 to get 1600 and do this?
Debit Accts Receivable for 1600
Credit Rental Revenue for 1600
1600
In this scenario, you are correct that the rental revenue of $17,600 represents the amount received for 11 months. To recognize the revenue that pertains to December, you can divide the total amount by 11 to determine the monthly rental revenue.
$17,600 / 11 = $1,600 per month
To record the adjusting entry for the December rental revenue:
Debit: Accounts Receivable $1,600
Credit: Rental Revenue $1,600
This entry will recognize the revenue for the month of December, even though the rent has not yet been received. Keep in mind that this adjustment assumes that the rental revenue is recognized evenly over the 11-month period.
To determine the amount for the December rent, you would need to divide the total rental revenue by the number of months specified in the question (11 months). In this case, you would divide $17,600 by 11, resulting in $1,600.
However, based on the information provided, it seems that the December rent has not been received yet. Therefore, you should not recognize the rent revenue for December until it is actually received. Instead, you would record it as an accounts receivable until it is received.
So, the journal entry to record the rent revenue for December would be as follows:
Debit Accounts Receivable $1,600
Credit Rental Revenue $1,600
This entry recognizes the rent as an accounts receivable, indicating that it is an amount owed by the customer but not yet received. Once the December rent is received, you would then remove the accounts receivable by crediting it and debiting the corresponding cash or bank account.