Why does the closing statement show a debit for the seller and a credit for the buyer for rent proration?

The closing statement reflects a debit for the seller and a credit for the buyer for rent proration primarily because actual days of ownership are used for calculation. This means that when a property changes hands, the seller may be entitled to rent collected for the period they own the property until the closing date, while the buyer begins their ownership from that date forward.

During the proration, the rent is calculated based on the number of days each party owns the property in that month. The seller is debited for the portion of rent that they have already received for days after the closing, as they will no longer be responsible for the property after that date. Conversely, the buyer is credited for the same amount since they will be responsible for the property and its associated income from the closing date onward.

This approach ensures that both parties have an equitable financial arrangement concerning the rental income associated with the property, reflecting the use of actual days of ownership.