Prepaid Rent. Stan rented an office building to Clay for
$3,000 per mont h. On December 29, 2018, Stan received a deposit of $4,000 in
addition to the first and last months’ rent. Occupa ncy began on January 2,
2019. On July 15, 2019, Clay closed his business and filed for bankruptcy .
Stan had collected rent for February, March, and April on the first of each
month. Stan had received May rent on May 10, but collected no payments
afterwards. Stan withheld $800 from the deposit because of damage to the
property and $1,500 for unpa id rent. He refunded the balance of the deposit to
Clay. What amount wou ld Stan report as gross income for 2018? for 2019?
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