P. Disco received $2,400 from a tenant on December 1 for three months' rent of an office. This rent was for December, January, and February.
If Disco debited Cash and credited Unearned Rental Income for $2,400 on December 1, what necessary adjustment would be made on December 31?
A) Unearned Rental Income 800
Rental Income 800
B) Rental Income 800
Unearned Rental Income 800
C) Unearned Rental income 1,600
Rental Income 1,600
D) Rental Income 1,600
Unearned Rental Income 1,600
E) None of the above

Question

Quizplus · Accepted Answer

On December 31, one month's rent ($800) has been earned, so Unearned Rental Income should be debited and Rental Income credited for $800.

P Disco Received $2,400 from a Tenant on December 1