On November 1, 2010, Wenger Co. paid its landlord $25,200 in cash as an advance

Question

On November 1, 2010, Wenger Co. paid its landlord $25,200 in cash as an advance rent payment on its store location. The six-month lease period ends on April 30, 2011, at which time the contract may be renewed. (f) If the advance payment made on November 1, 2010, had covered an 18-month lease period at the same amount of rent per month, how should Wenger Co. report the prepaid amount on its December 31, 2010, balance sheet? (Omit the "$" sign in your response.) Non-current asset $ Current asset $

Explanation / Answer

The monthly expense would have been 25200 / 18 = 1,400, so the balance would be 22400

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