MC Qu. 103 ABC Co. leased a portion of its store to ...
|
ABC
Co. leased a portion of its store to another company for eight months
beginning on October 1, 2014, at a monthly rate of $900. This other
company paid the entire $7,200 cash on October 1, which ABC Co. recorded
as unearned revenue. The journal entry made by ABC Co. at year-end on
December 31, 2014, would include:
|
| A debit to Cash for $7,200. | |
| A debit to Rent Earned for $2,700. | |
 | A credit to Rent Earned for $2,700. |
| A credit to Unearned Rent for $2,700. | |
| A debit to Unearned Rent for $4,500. |
$7,200 x 3/8 = $2,700 rent earned
