Question

fragment company leased a portion of its store to another company for eight months beginning on october 1, at a monthly rate of $1,275. fragment collected the entire $10,200 cash on october 1 and recorded it as unearned revenue. assuming adjusting entries are only made at year-end, the adjusting entry made on december 31 would be:

Answer 1

Total rent of the fragment company is equal to 10,000.

Rent income is the money made from renting out real estate, like office space, to other people. A sum of money paid by a lessee to a lessor in consideration for the use of machinery, equipment, etc. a regular payment made by a renter to a landlord in exchange for the use of land, a structure, an apartment, an office, or another piece of property.

Unearned money equals total rent (3 months / 8 months).

Unearned amount = 10,200x[3/8]

Unearned income = $3825

Log entry: $3825 in unpaid rent for the apartment

A/C Rent Cr $3825

Credit for $3825 of earned rent and a debit for unearned rent

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