Question

Alex Company rents space to a tenant for $2,200, per month. The tenant currently owes two months rent, November and December. The tenant has agreed to pay the November, December, and January rents in full on January 15 and has agreed not to fall behind again. The adjusting entry needed on December 31 is:
a. Debit Rent Receivable, $6,600; credit Rent Earned, $6,600.

b. Debit Unearned Rent, $4,400; credit Rent Earned, $4,400.

c. Debit Unearned Rent, $2,200; credit Rent Earned, $2,200.

d. Debit Rent Receivable, $4,400; credit Rent Earned, $4,400.

e. Debit Rent Receivable, $2,200; credit Rent Earned, $2,200

Answer 1

Answer:

The correct answer is D

Explanation:

The journal entry which is to be posted on December 31, is as:

Rent receivable A/c............................Dr   $4,400

        Rent Earned A/c...............................Cr    $4,400

As the two months rent is not paid so the adjusting entry which is to be posted is that the rent receivable account is debited whereas the rent earned account is credited with the amount of two months rent. (which is $2,200 + $2,200 = $4,400).