Fragmental Co

question 75

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.Assuming adjusting entries are only made at year-end,the adjusting entry made by Fragmental Co.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 Revenue for $2,400.
• E)A debit to Unearned Rent and a credit to Rent Revenue for $4,000.

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