On March 1,a landlord received $10,000 rent for the month of April.On March 1,the landlord will ________.

Question

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When the landlord receives rent in advance, it is considered unearned revenue because the landlord has not yet earned the rent for the month of April. Therefore, the landlord will increase Cash (asset account) and increase Unearned Rent Revenue (liability account) on March 1. Option A is incorrect because rent revenue should not be recognized until the month of April. Option C is incorrect because paid-in capital is not related to rent received. Option D is incorrect because rent expense should not be recognized until the month of April when the landlord has earned the rent.

On March 1,a Landlord Received $10,000 Rent for the Month