Question

On December 1, Lotsa Space Company received $24,000 from a tenant for 4 months' rent in advance. The entry on December 1, includes a ______. (Check all that apply.) $24,000 debit to Unearned Rent Revenue $24,000 credit to Prepaid Rent $24,000 credit to Rent Revenue $24,000 debit to Cash $24,000 credit to Unearned Rent Revenue

Answer 1

Answer: Dr: Cash, Cr: Unearned Rent Revenue

Explanation: The advance payment of rent is an income to the organisation. Since the income is pertaining to the preceding year. it will be recorded as an unearned rent revenue.

The journal entry is stated thus:

CR: Unearned Rent Revenue $24,000

DR: Cash $24,000

Being rent income for the preceding year rent income.