Fragmental Co

question 56

Multiple Choice

Fragmental Co.leased a portion of its store to another company for eight months beginning on October 1,at a monthly rate of $800.Fragmental collected the entire $6,400 cash on October 1 and recorded it as unearned revenue.The journal entry made by Fragmental Co.at year-end on December 31 would be:

• A)A debit to Rent Revenue and a credit to Cash for $2,400.
• B)A debit to Rent Revenue and a credit to Unearned Rent for $2,400.
• C)A debit to Cash and a credit to Rent Revenue for $6,400.
• D)A debit to Unearned Rent and a credit to Rent Earned for $2,400.
• E)A debit to Unearned Rent and a credit to Rent Earned for $4,000.

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Definitions:

Related Businesses

Companies or entities that engage in similar or complementary activities, often within the same industry or market.

Carve-out

A strategic move by a company to sell or spin off a portion of its business or assets.

Corporate Subsidiary

A company that is completely or majority-owned by another company, known as the parent company.

New Equity Financing

The process of raising capital through the sale of shares in a company to new investors.