Answer:
prepaid rent 6,400 debit
rent revenue 6,400 credit
--to record accrued rent revenue--
interest expense 540 debit
interest payable 540 credit
--to record accrued interest on the note--
depreciation expense 3,500 debit
accumulated depreciation-truck 3,500 credit
--to record the depreciation on company's truck--
Explanation:
<u>earned rent:</u>
9,600 for six months: 9,600 / 6 = 1,600 dollars per month
months from September 1st to December 31th: 4 months
earned rent revenue: 1,600 x 4 = 6,400 dollars
<u>interest acrued on the note:</u>
principal x rate x time
18,000 x 0.12 x 3/12 = 540
we ddebit the expense and credit the payable
<u>depreciation:</u>
for the amount stated we debit the expense and credit the accumulated depreciation
