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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:

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  • 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.

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