On November 1,Phone Center Received $4,800 for Two Years' Rent

question 58

Multiple Choice

On November 1,Phone Center received $4,800 for two years' rent in advance from Garrison Company.The November 30 adjusting entry that Phone Center should make is to:

• A)debit Rental Income;credit Unearned Rent $3,000.
• B)debit Cash;credit Rental Income $3,000.
• C)debit Unearned Rent;credit Rental Income $200.
• D)debit Unearned Rent;credit Rent Expense $200.

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Definitions:

Disclosure

The process of providing financial and other significant information about a company's operations, financial condition, and management to stakeholders.

Fair Market Value

The cost at which an asset would be sold in an open market scenario, involving a buyer and a seller who are both willing to transact and are well-informed about the essential details.

Goodwill

An intangible asset that arises when a company acquires another for a price higher than the fair value of its net identifiable assets.

Fair Values

The monetary amount expected from selling an asset or required to cover a liability, in a well-organized deal among market stakeholders, at the time of assessment.