Question

Sheridan Real Estate received a check for $28260 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $28260. Financial statements will be prepared on July 31. Sheridan Real Estate should make the following adjusting entry on July 31: O Debit Unearned Rent Revenue, $28260; Credit Rent Revenue, $28260. O Debit Cash, $28260; Credit Rent Revenue, $28260. O Debit Unearned Rent Revenue, $4710; Credit Rent Revenue, $4710. O Debit Rent Revenue, $4710; Credit Unearned Rent Revenue, $4710.

Answer 1

Answer:

The answer is Debit Unearned Rent Revenue, $4710; Credit Rent Revenue, $4710.

Explanation:

Rent revenue earned for the month is 28260/6= $4710 which should be credited to rent income account, whereas an adjustment for the revenue for the month must be made by debiting $4710 to Unearned Rent Revenue.