Rentals paid in advance

Hi Jilly,

In the following example the rental is paid quarterly in advance

the rental starts from 1 Sep 2023

So we have three quarters paid 01 Oct 23,1st of Jan 24 and 1st of Apr 24

but the question is what about the rental for Sep 23 how we will account for it,

Secondly ,the assessable premium will that be time apportioned or just as one time amount (2500-250(2500*.02*(6-1)) ,since the rent is for 7 months.

Thanks,

Q:

House 1
Amos purchased this house on 1 June 2023. He immediately undertook
repair work to the leaking roof that cost £5,000 and redecorated the
house at a cost of £800. The house was rented out, unfurnished, from
1 September 2023 on a six-year lease at an annual rental of £4,500,
payable quarterly in advance. The incoming tenant was charged a
premium of £2,500.

Answer:

Workings
(W1) House 1
(i) Rent received in period 1 September 2023 to 5 April 2024:
(£4,500 × 3/4) = £3,375
(ii) Lease premium
£
Premium 2,500
Less: (6 – 1) × 2% × £2,500 (250)
–––––
Assessable premium 2,250