PPW Co Leased a Portion of Its Store to Another Company

question 124

Multiple Choice

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

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Definitions:

Hindbrain

The posterior part of the brain comprising structures such as the medulla, pons, and cerebellum, involved in regulating basic physiological processes and movement.

Cerebellum

A part of the brain at the back of the skull in vertebrates, responsible for coordinating and regulating voluntary muscle movements, balance, and posture.

Coordination

The organization of different elements or activities to enable them to work together effectively.

Short-Term Memory

A cognitive system with a limited capacity that is capable of temporarily holding information available for processing.