8/29 - Instagram Post Solution

Straight-line Rent Expense Per Day = Total Rent Cost / 365

Total Rent Cost = $12,045 * 11 = $132,495

$132,495 / 365 = $363

$363 * 28 = $10,164

 

Months with 30 days will have expense of $10,890

Months with 31 days will have expense of $11,253

A company using the accrual method of accounting would record $10,890 expense in June, despite not actually having to pay out any cash.


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