Which of the following entries records the receipt of cash for three months' rent? The cash was received in advance of providing the service.

Question

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The cash received in advance for rent is considered unearned revenue. Therefore, the appropriate journal entry would be to debit Cash and credit Unearned Revenue. This entry recognizes that while the payment was received, the service of providing rent has not yet been rendered. Therefore, the revenue cannot be recognized yet as Rent Revenue. Prepaid rent (Option C) would be used if the company paid rent in advance, and Rent Expense (Option D) would be used if the company paid rent for the current period.

Which of the Following Entries Records the Receipt of Cash