A company receives rent for subletting part of its office block.
Rent, receivable quarterly in advance, is received as follows:
Date of receipt                 Period covered $
1 October 2001               3 months to 31 December 2001 7,500-
30 December 2001          31 March 2002 7,500
4 April 2002                      3 0 June 2002 9,000
1 July 2002                      30 September 2002 9,000
1 October 2002                31 December 2002 9,000
What figures, based on these receipts, should appear in the company’s financial statements for the year ended
30 November 2002?
Income statement Balance sheet
A $34,000 Debit Prepayment (Dr) $3,000
B $34,500 Credit Accrual (Cr) $6,000
C $34,000 Credit Accrual (Cr) $3,000
D $34,000 Credit Prepayment (Dr) $3,000

C $2,500 + $7,500 + $9,000 + $9,000 + $6,000
One month in advance = $3,000 Cr.