ABC Coleased a Portion of Its Store to Another Company for for Eight

question 261

Multiple Choice

ABC Co.leased a portion of its store to another company for eight months beginning on October 1,2011 at a monthly rate of $800.This other company paid the entire $6,400 cash on October 1,which ABC Co.recorded as unearned revenue.The journal entry made by ABC Co.at year-end on December 31,2011 would include:

• A)A debit to Rent Earned for $2,400
• B)A credit to Unearned Rent for $2,400
• C)A debit to Cash for $6,400
• D)A credit to Rent Earned for $2,400
• E)A debit to Unearned Rent for $4,000

---

Definitions:

Clever Hans

A horse in early 20th century Germany that was believed to have the ability to perform arithmetic and other intellectual tasks, later understood as an example of the observer-expectancy effect.

Psychic Abilities

Claimed abilities that extend beyond the known physical senses, such as telepathy or clairvoyance.

Delta Waves

Delta waves are slow brainwaves, predominant in deep sleep, associated with healing and regeneration in the human brain.

Representative Sample

A subgroup of a population that accurately reflects the members of the entire population, enabling statistically valid conclusions.