Question

On decemeber 1, 2018 shamrock company receieved $3600 from destiny, Inc. for rent of an office owned by shamrock company. The payment covers the period from December 1, 2018 through February 28, 2019. Shamrock Company recorded this as Deferred Rent Revenue when it was received on December 1. The adjusting entry on December 31 would include a:_________

a. debit to Rent Revenue of $4,800.
b. credit to Rent Revenue of $3,200.
c. debit to Deferred Rent Revenue of $4,800.
d. credit to Deferred Rent Revenue of $3,200.

Answer 1

Answer:

Credit to Rent revenue of $1,200.

Explanation:

Date        Account Titles and explanation   Debit     Credit

Dec 31 Deferred Rent Revenue                  $1,200

                Rent Revenue                                               $1,200

Thus, answer is Credit to Rent revenue of $1,200.

Workings

December - February = 3 month

Deferred Rent Revenue = $3,600 * 1 month / 3 month = $1,200