Accrued Rental Income
What is Accrued Rental Income?
Accrued rent income is rent earned but is yet to be received by period-end.
![ari 1](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-1.jpg)
How it Works
A business may earn income from rent on a weekly, fortnightly, or monthly basis.
![ari 2](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-2.jpg)
Often, though, an accounting period will end part way through a rental cycle.
![ari 3.5](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-3.5.jpg)
When taken, the vacation pay is treated as an expense.
![ari 4.5](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-4.5.jpg)
Because of this, your period-end reports will be missing income.
![ari 5](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-5.jpg)
This can be done each pay period, each month, or each quarter.
![ari 6](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-6.jpg)
To accrue vacation pay, you credit the accrued vacation account.
![ari 7](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-7.jpg)
To do this, you begin by calculating the amount of rent not yet received.
![ari 4.5](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-4.5.jpg)
Once calculated, you credit the rental income account.
![ari 9](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-9.jpg)
This shows that income will come from rent.
![ari 10](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-10.jpg)
After this, you debit the rent receivable account.
![ari 11](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-11.jpg)
This shows you have sent the value there for the time being.
![ari 12](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-12.jpg)
Eventually, the employee will take their vacation.
![ari 13](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-13.jpg)
Like other asset accounts, this account shows money or value that is owed to the business.
![ari 14](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-14.jpg)
Later, when the rental income is received, the money will be deposited in the bank.
![ari 15](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-15.jpg)
At that time, you will need to show value has come from rent receivable and gone to checking.
![ari 16](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-16.jpg)
To do this, you credit the rent receivable account.
![ari 17](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-17.jpg)
This shows you have taken value from the account.
![ari 18](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-18.jpg)
Then you debit the checking account.
![ari 19](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-19.jpg)
This shows you have sent the value to the checking account.
![ari 20](https://seeaccountingnow.online/wp-content/uploads/2021/08/ari-20.jpg)