On October 1,Vista View Company Rented Warehouse Space to a Tenant

question 164

Multiple Choice

On October 1,Vista View Company rented warehouse space to a tenant for $2,500 per month.The tenant paid five months' rent in advance on that date,with the lease beginning immediately.The cash receipt was credited to the Unearned Rent account.The company's annual accounting period ends on December 31.The adjusting entry needed on December 31 is:

• A)Debit Rent Receivable,$12,500; credit Rent Earned,$12,500.
• B)Debit Rent Receivable,$7,500; credit Rent Earned,$7,500.
• C)Debit Unearned Rent,$7,500; credit Rent Earned,$7,500.
• D)Debit Unearned Rent,$5,000; credit Rent Earned,$5,000.
• E)Debit Unearned Rent,$12,500; credit Rent Earned,$12,500.

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Definitions:

Debt Financing

Debt Financing involves raising capital by borrowing funds from individuals, banks, or other financial institutions that will be repaid over time with interest.

Equity Financing

Funds invested in new ventures in exchange for part ownership.

Repay Borrowed

The act of returning money that was borrowed from a person or institution.

Equity Financing

A method of raising capital through the sale of shares in a company, thereby giving investors ownership interests.