Leyland Realty Company received a check for $18,000 on July 1, which represents a 6-month advance payment of rent on a building it rents to a client.Unearned Rent Revenue was credited for the full $18,000.Financial statements will be prepared on July 31.Leyland Realty should make the following adjusting entry on July 31:
A)debit Unearned Rent Revenue, $3,000; credit Rent Revenue, $3,000.
B)debit Rent Revenue, $3,000; credit Unearned Rent Revenue, $3,000.
C)debit Unearned Rent Revenue, $18,000; credit Rent Revenue, $18,000.
D)debit Cash, $18,000; credit Rent Revenue, $18,000.

Question

Quizplus · Accepted Answer

The adjusting entry recognizes one month's worth of rent revenue earned, which is $18,000 divided by 6 months, resulting in $3,000.

Leyland Realty Company Received a Check for $18,000 on July