Rent paid in advance would be regarded as a prepaid expense by the renter and as unearned revenue by the building owner.

Question

Quizplus · Accepted Answer

Rent paid in advance by the renter is recorded as a prepaid expense on the renter's books since the renter hasn't yet received the benefit of the rental expense. On the other hand, the building owner records the received rent as unearned revenue since they haven't yet earned the rental income.

Rent Paid in Advance Would Be Regarded as a Prepaid