On January 1, 2013, Wellburn Corporation leased an asset from Tabitha Company. T
ID: 2381129 • Letter: O
Question
On January 1, 2013, Wellburn Corporation leased an asset from Tabitha Company. The asset originally cost Tabitha $390,000. The lease agreement is an operating lease that calls for four annual payments beginning on January 1, 2013, in the amount of $31,000. The other three remaining payments will be made on January 1 of each subsequent year. Which of the following journal entries should Tabitha record on January 1, 2013?
On January 1, 2013, Wellburn Corporation leased an asset from Tabitha Company. The asset originally cost Tabitha $390,000. The lease agreement is an operating lease that calls for four annual payments beginning on January 1, 2013, in the amount of $31,000. The other three remaining payments will be made on January 1 of each subsequent year. Which of the following journal entries should Tabitha record on January 1, 2013?
Explanation / Answer
Option D:
DR. Cash 31,000
CR. Unearned Rent Revenue 31,000
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