15 Jason Company paid $5,400 for one year's rent in advance beginning on October 1, Year...

Question

Question

business accounting

Answer 1

Answer #1

Rent paid for 12 months = 5400

Per month rent usage = 5400 /12 = 450

In the current year 3 months of rent will be used from October till December end

Hence, total rent expense = 450 * 3 = 1350

Rent expense in income statement = 1350

In cash flow statement the entire cash spent is recorded as an outflow irrespective of the use.

Rent cah outflow in cash flow statement = 5400

Answer 2

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