Fragment Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $1,075. Fragment collected the entire $8,600 cash on October 1 and recorded it as unearned revenue. Assuming adjusting entries are only made at year-end, the adjusting entry made by Fragment Co. on December 31 would be:

Question

Answer

A debit to Unearned Revenue and a credit to Rent Revenue for $5,375.

Answer

A debit to Unearned Revenue and a credit to Rent Revenue for $3,225.

Answer

A debit to Rent Revenue and a credit to Unearned Revenue for $3,225.

Answer

A debit to Cash and a credit to Rent Revenue for $8,600.

Answer

A debit to Rent Revenue and a credit to Cash for $3,225.

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Fragment Co. leased a portion of its store to another company for eight months b...

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