Answer to Question #319417 in Accounting for Milan

Question

Sampson Manufacturing Company (SMC) has an empty warehouse that it rents out to a local beer distributor for a monthly rental fee of $6,000. Terms of the rental agreement include a 10-day payment grace period and an additional $200 monthly utility expense, necessary to maintain the beer distributor's products at the proper temperature, paid by SMC. Assuming that SMC records journal entries on a monthly basis, and that it receives the December monthly rent payment on January 9th, what is the adjusting journal entry (if any) made by SMC on December 31 (with December's $200 utility payment made on January 2)?

- Debit Rent Receivable $6000

- Debit Utilities Expense $200

- Credit Rent Revenue $6000

- Credit Utilities Payable $200

The answer is highlighted. Are there any other journal entries that I need to know for this question? Thank you.

Answer 1

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