69. Rents on a duplex total $6000 monthly and are due the first of each month. If the sale of the duplex closes on the 15th of a month, the rental income will be reflected on the closing statement as a
Answer: C
The rental income will be reflected as a credit of $6000 to the seller only.
Since the sale of the duplex closes on the 15th of the month, the entire rental income of $6000 for that month is attributable to the seller, as they owned the property for half of the month.
A) debit to the seller of $300 and a credit to the buyer of $300.
This option is incorrect because it suggests that there are adjustments made to both the seller and the buyer for the rental income. Since the seller is entitled to the full month's rent up to the closing date, there should not be a debit to the seller or a credit to the buyer.
B) credit to the seller of $300 and a debit to the buyer of $300.
This option is also incorrect. It implies that only a small portion of the rental income is being credited to the seller, which does not reflect the reality of the situation. The seller is entitled to the entire rental income for the month, not just a fraction.
C) credit of $6000 to the seller only.
This option is correct because the seller is entitled to the full rental income of $6000 for the month, as they owned the property until the 15th when the sale closed. The income is thus credited entirely to the seller.
D) credit of $6000 to the buyer only.
This option is incorrect as it indicates that the buyer would receive the entire rental income, despite the fact that the property was owned by the seller for part of the month. The buyer does not earn the rental income until they take ownership of the property.
Conclusion
The correct answer is definitively option C, as it accurately reflects that the seller is entitled to the full rental income for the month prior to the sale. All other options misinterpret the division of rental income and do not correctly represent the financial transaction between the seller and buyer at closing.