[vodrldnr]

On July 1, Year 1, Gee, Inc. leased a delivery truck from Marr Corp. under a 3-year operating lease. Total rent for the term of the lease will be $36,000, payable as follows:

12 months at $500 = $6,000

12 months at $750 = $9000

12 months at $1,1750 = $21,000

All pmts were made when due. In Marr’s June 30, year 3, B/S, the accrued rent receivable should be reported as:

A. $0

B. $9,000

C. $12,000

D. $21,000

Correct answer is $9,000

I just don’t get wiely’s way they express the problem. “They said payable as follow”. But how the heck I can know 6,000 for year 1 and 9,000 for year 2 and 21,000 for year 3? The problem makes no mention about the payment schedule. I really hate question like this and found so many errors in wiley…

It ain't About How Hard You Hit

[cpaMD86]

Operating leases are recognized on a uniform basis, regardless of the payment schedule. So, on a $36,000, 3 year agreement, you'd expect to earn $1,000 a month (36,000/36).
At the end of 24 months you would have earned $24,000, but you've only received 15,000.

24,000-15,000 = 9000

Cash 15000
AR 9000
Revenue 24000

I hope this helps.

AUD - 80
BEC - 80
FAR - 82
REG - 79

Be willing to be inconvenienced for your conviction.

Roger/Ninja MCQ/Ninja Notes

FAR: 9/3

[Author]

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