I am going to shorten the question to the part that I am confused with.
CPA-00613: "Kemp must determine the December 31, Year 1 year-end accruals for rent expense. A store lease, effective December 16, Year 0 calls for fixed rent of $1200 per month, payable one month from the effective date and monthly thereafter."
In its December 31, Year 1 balance sheet, Kemp should report accrued liabilities of?
Answer: Store lease fixed rent ($1,200 x 1/2 month) = $600
My question: Why is it taking away $600. Shouldn't it be taking away $1200 on Jan 16, Year 1. And the 11 months after that? So shouldn't accrued liabilities be $12000 for December 31 Year 1?
I might be reading this question wrong or I might have a misunderstanding of what accrued liabilities are.