On February 1, 2015, Apollo Company Received $24,000 in Advance

question 19

Multiple Choice

On February 1, 2015, Apollo Company received $24,000 in advance for a three-year rental of land, and credited Rent Revenue for the entire amount. The correct December 31, 2015 adjusting entry would be

• A) Unearned Rent 16,667 Rent Revenue 16,667
• B) Rent Revenue 16,667 Unearned Rent 16,667
• C) Unearned Rent 7,333 Rent Revenue 7,333
• D) Rent Revenue 7,333 Unearned Rent 7,333

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Definitions:

Lockbox Fee

A charge by banks for the service of collecting payments through a secured post office box and processing them for the account holder.

Money Market Securities

Short-term financial instruments, typically with high liquidity and very low risk, used by individuals and corporations to manage cash.

Average Daily Cost

The average cost incurred by a business or an individual on a daily basis.

Lockbox System

A service provided by banks to process payments by diverting them directly to a special post office box, speeding up the collection process.