- 10 Marks
FA – L1 – Q40 – Accruals and prepayments
Prepare rent receivable and interest payable ledger accounts for James for 20X9 based on given rental and interest data.
Question
James owns various properties which he rents out under short-term lets; some tenants pay in advance, some in arrears. Similarly with his various borrowings the interest is paid in arrears and in advance.
During 20X9 rent collected was GH₵229,500 and interest charged to the statement of profit or loss was GH₵52,500.
Rents receivable and paid in advance together with amounts of interest prepaid and payable at the statement of financial position dates were as follows.
| 31 December | ||
|---|---|---|
| 20X8 | 20X9 | |
| GH₵ | GH₵ | |
| Rents owed by tenants | 34,200 | 40,500 |
| Rents prepaid by tenants | 20,700 | 15,300 |
| Prepaid interest | 3,500 | 5,600 |
| Interest payable | 9,800 | 7,000 |
Required
Write up the rent receivable account and the interest payable account for the year ended 31 December 20X9.
Find Related Questions by Tags, levels, etc.
- Tags: Accruals, Financial Statements, Interest Payable, Ledger accounts, Prepayments, Rent Receivable
- Level: Level 1
- Topic: Accruals and prepayments
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