Medina rents a portion of its parking lot to the neighboringbusiness under a long-term...

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Accounting

Medina rents a portion of its parking lot to the neighboringbusiness under a long-term lease agreement that requires payment ofrent 6 months in advance on April 1 and October 1 of each year. TheOctober 1, 2019, payment was made and recorded as prepaidrent. Indicate whether or not this item requires anadjusting entry at December 31, 2019, and if does, indicate whichaccounts are increased by the adjustment and which aredecreased.

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YES this item requires an adjusting entry at Dec 31 2019 This is because when Rent is received as an advance for 6 months on 1 Oct See Answer

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In: AccountingMedina rents a portion of its parking lot to the neighboringbusiness under a long-term lease...Medina rents a portion of its parking lot to the neighboringbusiness under a long-term lease agreement that requires payment ofrent 6 months in advance on April 1 and October 1 of each year. TheOctober 1, 2019, payment was made and recorded as prepaidrent. Indicate whether or not this item requires anadjusting entry at December 31, 2019, and if does, indicate whichaccounts are increased by the adjustment and which aredecreased.