Debit Rent Expense is $8,000 whereas the credit Prepaid Rent is $8,000 of the above given accounting equation .
What is Deferred revenue ?
Money received for goods or services but not yet earned is referred to in accrual accounting as deferred income (also known as deferred revenue, unearned revenue, or unearned income). The revenue recognition principle states that it is recorded as a liability up to the time of delivery, at which point it is changed to revenue.
For instance, a business might get an annual software license payment on January 1 from a client who paid it in full. The business' fiscal year, nevertheless, concludes on May 31. Therefore, the business adopting accrual accounting only includes the fee in its revenues for the fiscal year it received the money, or five months' worth (5/12), of the fee. On the balance sheet for that year, the remaining amount is added to deferred income (liability).
To learn more about Revenue checkout the link below :
brainly.com/question/16232387
#SPJ9
