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Rent paid on 1 october 2002 for the year to 30 september 2003 was $1200,and rent pad 1 cotober 2003 for the year to 30 september 2004 was $1600.rent ,as shown in the income statement for the ended 31 december 2003, would be?
We want the expense for 1 January 2003 to 31 December 2003.
From 1 January to 30 September is part of the payment of 1200 which was for 12 months to 30 September 2003. 1 Jan to 30 Sep is 9 months, so the cost for that period is 9/12 x 1200 = $900.
From 1 October to 31 December is part of the patient of 1600 which was for 12 months to 30 September 2004. 1 Oct to 31 Dec is 3 months, so the cost for that period is 3/12 x 1600 = $400.
So the total expense for our year is 900 + 400 = $1,300.
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