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Ivan
2 years ago
11

Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $1

,125. Fragmental collected the entire $9,000 cash on October 1 and recorded it as unearned revenue. Assuming adjusting entries are only made at year-end, the adjusting entry made by Fragmental Co. on December 31 would be:
Business
1 answer:
zloy xaker [14]2 years ago
5 0

Answer:

Debit unearned rent for $3,375

........Credit rent revenue for $3,375

Explanation:

The adjusting entry made by Fragmental Co. on December 31 is calculated as;

Number of months from October 1st to December 31st = 3 months

Rent revenue earned for 3 months = $1,125 × 3 = $3,375

Therefore, the adjusting entry would be;

Debit unearned rent for $3,375

..........Credit rent revenue for $3,375

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