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In October of the current year, Jasmine received a $15,520 payment from a client for 32...

In October of the current year, Jasmine received a $15,520 payment from a client for 32 months of rent. The rental period begins on September 1 of this year. This amounts to $485 per month. Jasmine is a calendar-year taxpayer.

What amount of the $15,520 payment, if any, must Jasmine recognize this year if she uses the accrual method of accounting?

Numeric Response ?

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Expert Solution

CALCULTION OF MONTHLY RENT EXPENSES
Working Notes: Total Amount received $               15,520
Divide By "/" By
No of Months Payment $                       32
Monthly Rent $                     485
Solution:
Calculation of Rent expenses recognize in the current year
As per accrual basis of accounting
Monthly Rent = $                     485
No. of Months Expired in calendar Year ( Sept To December)                              4 Months
Rent Recognized = Monthly Rent X No. of Months Expired
Rent Recognized =   $                     485 "X" 4 Months
Rent Recognized =   $                 1,940
Answer = $ 1,940

ekkarill92 answered 2 years ago
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