Abdulla,Co $$\begin{array} { l l l } \text { Oct. } 01& \mathrm { Cash } & 15,000 \\& \text { Rent Revenue Earned }&&15,000\end{array}$$

question 26

Essay

Abdulla,Co.collected 6-months' rent in advance from a tenant on October 1 of the current year.When it collected the cash,it recorded the following entry:
$$\begin{array} { l l l } \text { Oct. } 01& \mathrm { Cash } & 15,000 \\& \text { Rent Revenue Earned }&&15,000\end{array}$$
Assuming Abdulla only prepares adjustments at year-end,prepare the required adjusting entry at December 31 of the current year.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one could have received by taking the alternative action.

Forgone Interest

The potential interest earnings lost by choosing one investment over another or by keeping money in a non-interest-bearing account.

Economic Growth

The increase in the amount of goods and services produced by an economy over time, typically measured as the percent rate of increase in real gross domestic product (GDP).

Unemployment Rate

The level of the labor force that consists of individuals who are jobless but actively seeking employment.