Whiner Corporation is required to make a single payment to its landlord pre-payi

Question

Whiner Corporation is required to make a single payment to its landlord pre-paying the rent for the next 12 months. Wh ners rental payment covers the period beginning on 7/1" and ending on After making year-end adjustments Whiner had the following activity in its pre- 6/30 of each year. paid rent account for the year ended 2009 Prepaid Rent BB 1/1/2009 6,000 18,000 EB 12/31/2009 9,000 15,000 l ons how men Given the above information, what was the amount of expense that Whiner would have recorded on its accrual basis income statement for the year ended 12/31/2009? A. $24,000 B. $18,000 C. $15,000 D. $9,000 E. None of the above Which of the following statements best describes Whiner's rental agreement at 7/1/2008 versus 7/1/2009? 7. A. Whiner's annual rent payment increased by $6,000 between 7/1/08 and 7/1/09 B. whiner's annual rent payment decreased by $3,000 between 7/1/08 and 7/1/09 C. Whiners annual rent payment increased by $3,000 between 7/1/08 and 7/1/09 D. Whiner's annual rent payment decreased by $9,000 between 7/1/08 and 7/1/09, E. The problem does not provide the necessary information to answer this question.

Explanation / Answer

6 Amount of rent expense for the year ending 12/31/2009 = $15000 7 Whiner's annual rent payment increased by $6000(18000-12000) between 7/1/08 and 7/1/09 7 6 months of rent make up the beginning balance

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