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hi i need some help with this problem, i don't understand where 10/12 comes from
On November 1, 2013, Manufacturing rented a portion of its factory to a tenant for $30,000 per year, payable in advance. The payment for the 12 months ended October 31, 2014, was received as required and was credited to rent revenue.
The adjusting entry was shown as a debit to rent revenue calculated as (10/12 x 30,000) which comes out to be 25,000 and a credit to unearned rent revenue for 25,000.
Please say why every step is so.
On November 1, 2013, Manufacturing rented a portion of its factory to a tenant for $30,000 per year, payable in advance. The payment for the 12 months ended October 31, 2014, was received as required and was credited to rent revenue.
The adjusting entry was shown as a debit to rent revenue calculated as (10/12 x 30,000) which comes out to be 25,000 and a credit to unearned rent revenue for 25,000.
Please say why every step is so.
Accounting allocation homework problem need help?
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