The Cosmo Construction Company received $12, 000 for six months rental income in advance on November 1, 2010, and credited the Rental Revenue account.The required adjusting entry on December 31, 2010, would include a

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DThe total rental income for six months is $12,000, which means the monthly rent is $2,000 ($12,000 / 6 months). By December 31, 2010, two months have passed, so $4,000 of the rent ($2,000 per month * 2 months) has been earned, leaving $8,000 unearned. The correct adjusting entries would involve recognizing the earned portion and adjusting the unearned portion accordingly. Option B correctly adjusts the Rental Revenue account by debiting it for $8,000, moving it from earned revenue to unearned, reflecting the amount that is still unearned as of December 31. Option D is also correct as it involves debiting Rental Revenue for $4,000, which correctly adjusts the account to reflect the revenue earned for the two months out of the six-month period.

The Cosmo Construction Company Received $12, 000 for Six Months