At the end of December, the owner of an apartment complex realized that the December rent had not been collected from one of the tenants. December 31 was the end of the accounting year; therefore, the owner made the appropriate adjusting entry at that time. When the December rent was collected in January of the following year, the entry made by the apartment owner should include which of the following?
A) debit to Rent revenue collected in advance.
B) credit to Rent revenue.
C) credit to Rent receivable.
D) debit to Rent receivable.

Question

Quizplus · Accepted Answer

Since the December rent was collected in January of the following year, it means that the rent was initially recorded as Rent receivable in the previous accounting period. Therefore, the entry made by the apartment owner should include a credit to Rent receivable, indicating the reduction of the amount owed by the tenant.

At the End of December, the Owner of an Apartment