If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit
A) Cash.
B) Prepaid Rent.
C) Unearned Rent Revenue.
D) Rent Revenue.

Question

Quizplus · Accepted Answer

When a business pays rent in advance and debits a Prepaid Rent account, it means that the business has not yet earned the rent expense for the following period. The company receiving the rent payment will credit the Unearned Rent Revenue account as they have not yet earned the rent revenue. Therefore, the correct answer is C.

If a Business Pays Rent in Advance and Debits a Prepaid