Question
Fragment Company leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $975. Fragment
Fragment Company leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $975. Fragment collected the entire $7,800 cash on October 1 and recorded it as unearned revenue. Assuming adjusting entries are only made at year-end, the adjusting entry made on December 31 would be:
Multiple Choice
-
A debit to Unearned Revenue and a credit to Rent Revenue for $4,875.
-
A debit to Rent Revenue and a credit to Cash for $2,925.
-
A debit to Rent Revenue and a credit to Unearned Revenue for $2,925.
-
A debit to Cash and a credit to Rent Revenue for $7,800.
-
A debit to Unearned Revenue and a credit to Rent Revenue for $2,925.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started