A journal entry to record a receipt of rent in advance will include a
A) debit to Rent Revenue.
B) credit to Rent Revenue.
C) credit to Cash.
D) credit to Unearned Revenue.

Question

Quizplus · Accepted Answer

When rent is received in advance, it is recorded as a liability known as unearned rent revenue because the rent has not yet been earned by the landlord. Therefore, the journal entry to record the receipt of rent in advance will include a credit to Unearned Revenue. The opposite entry will be a debit to Unearned Revenue once the rent is earned by the landlord.

A Journal Entry to Record a Receipt of Rent in Advance