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On January 1, Fey Properties collected $7,200 for six months’ rent in advance from a tenant renting an apartment. Fey Properties prepares monthly financial statements. Which of the following describes the required adjusting entry on January 31? A. Debit Unearned rent revenue for $1,200 and Credit Rent revenue for $1,200 B. Debit Cash for $6,000 and Credit Unearned rent revenue for $6,000 C. Debit Rent revenue for $1,200 and Credit Unearned rent revenue for $1,200 D. Debit Cash for $7,200 and Credit Rent revenue for $7,200 E. Debit Unearned rent revenue for $6,000 and Credit Cash for $6,000

Respuesta :

Answer:

A. Debit Unearned rent revenue for $1,200 and Credit Rent revenue for $1,200

Explanation:

The Journal entry is shown below:-

1. Cash Dr,                                       $7,200

         To unearned rent revenue             $7,200

(Being six month advance rent is recorded)

2. Unearned rent revenue Dr,         $1,200

 ($7,200 ÷ 6 months) × 1 month

              To Rent revenue                       $1,200

(Being rent earned is recorded)

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